Credit counseling sounds like it would be a great deal -- free review of your finances, only one monthly payment that they will manage to make payments to your other accounts, and maybe lower overall payments on your credit cards.
Sounds good, but before you jump to respond to TV and internet ads, you should know a few basic facts:
So should you use a credit counselor? Well that depends on your circumstances. Most credit card companies have “hardship programs” that behave exactly as a DMP -- they close your account and convert it into a fixed loan at a lower rate, thereby lowering your payment. Most of the time, you can get into a hardship program on your own by explaining that you’re in difficult financial situation or threaten to go to a credit counselor or declare bankruptcy. If you can get into hardship programs on your own, then you can save $300-600 per year in fees by doing it on your own.
I’m of the opinion that credit counseling is worth the fees that you’ll spend, even though you’re in a tough financial situation. Having a good credit counselor as your partner can keep you more disciplined and motivated to get out of debt, especially if you’ve struggled with debt in the past and haven’t been able to do it on your own. So if you have significant debt (over $10K), are at severe risk of not being able to continue to make debt payments at their current level, and have struggled to pay if off credit counseling could be a great option for you.
You can get out of debt on your own, but you're more likely to succeed with some help.
I love Tricare – I think it is great insurance. However, there are times when Tricare doesn’t cover all your costs, expecially if you are a retiree or using Tricare Standard. As a result, several companies and organizations offer Tricare supplemental insurance policies. A Tricare supplemental insurance policy covers some or all of the [...]