Many of us are aware of the benefits of consumer credit counseling services that are widely available today. In addition to being able to assess your current debts and your financial situation, these services could develop a debt elimination plan for you in order to minimize or completely eliminate your debts within a period of time. This would eventually leave you debt free, something that is extremely attractive, especially for those who are struggling deeply with credit card debt, for example.

 

Despite the many advantages of this service, it should be noted that it also has some disadvantages. Recognized as a different substitute for bankruptcy, consumer credit counseling wouldn’t work unless payments are made on time and without delay, or you could be paying more instead of less. This could also mean that your credit rating suffers. Although most of them claim to be non-profit, keep in mind that many of these service agencies charge upfront fees (they could be as high as a few thousand dollars). On top of that, many of these agencies require you to pay a small amount of monthly fee (which builds up to a large amount of money over a 3-5 year period of time).

 

Other disadvantages include the fact that if you are having difficulty paying your minimum monthly credit card payments, it is not recommended to take out this service, as the monthly payments tend to be higher (to offset the debt you have incurred as well). To conclude, make sure that before you sign up for any consumer credit counseling, you read the contract details carefully and agree to the terms before signing. This is honest advice from a former consumer credit counseling employee.