Learn Why A Large Amount Of Consumer Credit Counseling Programs Fail To Work!

This concise writing will reveal to you some of the problems with online consumer credit counseling programs. These are the issues that result in a drop off rate of in some cases over 80% of the people enrolled in these programs. People should be aware of these facts before they get themselves into a online consumer credit counseling program to guarantee themselves they are making a good financial move.

1. Many of the consumer credit counseling firms are created and funded by the actual credit card companies themselves. They are somewhat of a middle man for the credit card companies to collect the debt amount owed.

2. The consumer credit counseling firms work for and represent the credit card companies; they do not work on behalf of the debtor. The credit card establishments dictate to the credit counseling company the monthly minimum payment that is required and the interest rate. There is no middle ground at all on this.

3. The consumer credit counseling firms should be able to reduce the interest rate, however they cannot actually reduce the original balance. The common interest rate on one of these programs is around 12% which is more in the middle than actually being very low. By not reducing the original balance they aren't really a form of credit card debt reduction, this is just an sped up payment program.

4. You will end up actually putting out more than the original debt amount, due to the monthly maintenance fees, APR and lowered monthly payments which drastically increases the amount of time you are going to be living with debt.

5. It can have a short term bad effect on your credit score/report and is made a public record on your credit history, during the time you are in the program.

6. Getting a home loan while on a consumer credit counseling program becomes extremely complicated, almost impossible.

7. Here is the biggest contributor to the 80% drop off rate and read very carefully. If you fall behind only one payment while on a online consumer credit counseling program you will be kicked out of the program and the credit card companies will not allow you to re-enroll into another program for up to a year. Placing your bills to where they were prior to enrolling into the program, high interest and all. This is the reason why over 75% of the debtors signed into these programs drop out.

I mean think about it for a second. They place you into a online consumer credit counseling program that may take 5 years or more. As everyone knows or will come to know the adventure that is life has its good times and its bad times. If you find it extremely hard to be on the program in the first place you will drop off. Any volatile financial problems as big or small as they may be can contribute to you missing just one payment and getting kicked off of the program. You need to very seriously think about how unwavering your finances and income security are before you enroll into a consumer credit counseling program to keep away from being part of that 80%. The bottom line is those individuals with a larger sum of debt such as $20,000 or more should really lean more towards debt settlement than credit counseling. Credit counseling is much more suited for individuals with smaller amounts of debt that do not have much of any quarles staying current in the first place.