credit card debt Archives - Consumer Credit

What Will You Do With Your Tax Refund?

Dilini Dias Dahanayake — Wed, 10 Apr 2024 15:00:11 +0000

As the tax season wraps up, many of us are eagerly anticipating our tax refunds. This influx of money presents a great opportunity to improve our financial health. The experts at American Consumer Credit Counseling (ACCC) suggest several smart strategies for using your tax refund to make a significant impact on your finances. Whether you’re aiming to pay off debt, invest in your future, or simply improve your financial management, there’s a way to make your tax refund work for you.

How are you planning on using your tx refund to your advantage? Here are some tips from ACCC!

What Will You Do With Your Tax Refund?

A big cash infusion can do many things to your finances. However, you have to make sure you spend that money wisely. The big chunk of cash infusion you receive during tax season needs to be strategically put to use in order to ease the stresses of financial management. What will you do with your tax refund? How are you planning to spend it? Or will you be saving it for the future or put it towards your emergency funds? Here are some things we at ACCC think you can do with this year’s tax refund.

1. Pay Off High-Interest Debt

One of the wisest moves you can make with your tax refund is to pay off or significantly reduce high-interest debt, especially credit card debt. High-interest rates can make it challenging to pay off the principal amount, trapping you in a cycle of debt. By using your tax refund to pay down this debt, you can save yourself from paying exorbitant interest fees in the long run. ACCC emphasizes that paying off credit card debt not only improves your credit score but also relieves financial stress. This allows you to allocate future funds towards other financial goals. Effective debt management is an essential part of financial management. Therefore understanding your debt fully and reserving a certain amount from your tax refund will help you ease your financial burden.

2. Build an Emergency Fund

An emergency fund is a financial safety net designed to cover unexpected expenses such as medical bills, home repairs, or sudden unemployment. If you don’t already have one, consider using your tax refund to start an emergency fund. American Consumer Credit Counseling advises that an ideal emergency fund should cover three to six months of living expenses. This fund will give you peace of mind and protect you from falling into debt during tough times. Having a safety net gives you financial security and peace of mind. Your financial goals must always have some priority on enhancing your emergency funds.

3. Contribute to Retirement Savings

Planning for the future is essential, and contributing to your retirement savings is a step in the right direction. If you have an Individual Retirement Account (IRA) or a 401(k), consider using your tax refund to make an additional contribution. Investing in your retirement not only secures your future but can also provide tax benefits. ACCC recommends consulting with a financial advisor to make the most of your retirement savings strategies.

4. Invest in Personal Development

Investing in yourself can yield the highest returns. Whether it’s taking a course to enhance your skills, obtaining a certification to advance your career, or even pursuing a hobby that enriches your life, using your tax refund for personal development can open up new opportunities and increase your earning potential in the long run. American Consumer Credit Counseling highlights the importance of continuous learning and growth for financial success. Additional education and qualification can pave the way to career growth and in turn result in income growth. All of these steps you take to develop your self personally will have a positive impact on your financial growth.

5. Budget for Big-Ticket Items

If you’ve been eyeing a major purchase, such as a new appliance or a family vacation, using your tax refund can be a smart way to cover these expenses without dipping into your savings or resorting to credit. Budgeting for these big-ticket items in advance can help you make the most of your refund while avoiding financial strain later.

Bottom Line…

Your tax refund offers a unique opportunity to strengthen your financial position. Whether it’s paying off credit card debt, building an emergency fund, contributing to retirement savings, investing in personal development, or budgeting for significant expenses, the key is to use this windfall strategically. American Consumer Credit Counseling is here to guide you through making informed decisions with your tax refund, helping you achieve financial stability and peace of mind. Remember, thoughtful planning and wise financial choices today can lead to a brighter, more secure tomorrow.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

Secured and Unsecured Credit Cards Explained

Dilini — Mon, 26 Feb 2024 16:00:22 +0000

Our debt counselors know that managing your finances is not straightforward. It has its unique set of challenges and sensitivities that you must carefully deal with at all times. Credit is a big part of the construct of your overall finances. Your financial acceptance as a responsible person depends largely on how you maneuver your credit journey. How you manage your consumer credit says a lot about your financial responsibility and credibility. Therefore, understanding the basics of credit is crucial for your overall financial management journey. This post is dedicated to the concept of secured and unsecured credit cards.

Unsecured cards have no collateral, while secured cards have collateral backing it.

What is Credit

Credit is the ability to buy something now but pay for it later. Using credit can be incredibly convenient. However, it can also be the source of financial troubles for people who have difficulty controlling their spending. The general term credit in a financial management perspective can also refer to your credit score. This is a number from 300-850 that tells lenders how creditworthy you are. The higher your score, the more attractive you are to lenders and creditors. Your credit score is based on your use of credit in the past and how likely you are to repay loans in a timely way. Knowing how to manage credit and how to improve your credit score are essential skills for managing money and reaching your financial goals. So how exactly do you establish credit? Where do you begin?

Secured and Unsecured Credit Explained

Secured Credit Cards

No one starts off with a credit history. If you are starting your independent financial journey, the best place to start might be a secured credit card. This is a method used by lenders to establish your creditworthiness. These types of credit cards are identical to the unsecured ones. The only difference is that you have to make a minimum deposit also known as a security deposit to receive a credit limit.

These types of cards are usually targeted to consumers who are trying to build their credit from scratch or people trying to rebuild their credit. The security deposit typically acts as collateral if a default may occur. This deposit is fully refundable as and when you upgrade to an unsecured card or payoff the balances in full and close your account.

Your credit limit is often the amount you put down as a security deposit when it comes to this type of credit card. For example, if your security deposit was $200, your credit limit will also be $200. If you need a larger credit limit on your card, you will simply need to put down a larger security deposit. These deposit amounts typically range from $200 to $2500.

More on Secured Credit:

Some lenders do offer the flexibility of increasing your credit limit on your secured card without an additional deposit under certain conditions. For instance, you must make the first five payments on time in order for you to be eligible for an increase in credit limit. This can also act as an incentive to practice responsible credit behavior.

Like any other form of credit, you will pay interest and fees if you carry a balance month to month. Therefore, paying your secured credit card dues on time and in full is the only expectation you must fulfill. This is essentially a way to establish your credit. Your responsible payment history is a good reflection on your credit report and a solid foundation to building a good credit score. Maxing out on your secured credit cards or missing payments can reflect negatively on your credit report. Like any other form of credit, your secured credit lines are also the three main credit bureaus.

How to Apply for a Secured Card

Applying for any credit card must have the appropriate amount of research. Depending on your financial objectives and your requirement you must speak with your potential lenders to find the most suitable choice. Once you do, you will need to provide the following information:

Name
Date of birth
Address
Social Security number
Employment information
Income

Unsecured Credit Cards:

These are the most common type of credit cards. Generally, if someone says they are applying for a credit card they are applying for an unsecured credit card. The term unsecured means that this type of credit card is not protected by collateral. Essentially if you fail to make payments, there is no deposit that the lender keeps as security.

The general principle of debt is, once a lender gives out a debt they expect to be repaid. There are different types of debts. If a consumer is unable to repay debt such as their mortgage or auto loan, they are able to seize or repossess the assets to cover their dues. However, the riskiest type of debt is the topic in discussion, unsecured debts. This is because unlike any other debt, this type of debt does not hold collateral. This is why lenders impose conditions such as interest and financial charges on consumers who fail to make their dues on time on their credit accounts.

How Can You Get Unsecured Credit Cards?

Lenders analyze the financial history and responsibility of consumers when a consumer applies for an unsecured credit card. The tools they use to do that is the consumer’s credit rating and credit history. This is an unbiased tool to gauge the consumer’s financial responsibility. Your credit limit depends on your credit rating. Depending on how you manage your unsecured credit cards, lenders extend your credit limit. If you are using your credit lines responsibly, making payments on time, this is a fool-proof way to build your credit.

You may even notice that you are receiving credit card offers from different lenders as you go along your credit journey. This is a good sign as your lenders are seeing you as a financially responsible person to offer credit to. However, it does not mean that you accept every credit card offer that comes your way. You must always stay true to your needs. Do you really need a travel credit card or will you do better with a credit card that gives you higher cashback? What are the annual fees, interest rates, and other financial charges looking? Are they in line with your overall financial objectives?

Once you establish a credible credit history obtaining an unsecured credit card is not hard. However, using them responsibly is the harder part. How are these different credit lines impacting your overall debt management process? If you have derailed along the way and have more credit card debt than you can handle, then you should not waste any time seeking help. Depending on the extent of your debt, you may even need credit debt counseling with a reputable credit counseling agency.

Secured and Unsecured Credit Cards

Whilst a secured credit card is a good stepping stone into building your credit an unsecured credit card is a better choice in the long run. If you compare secured and unsecured credit cards the latter offers more perks, rewards, flexibility, and room to grow in your credit journey. Generally speaking, unsecured credit cards are a better deal for consumers. When a card is unsecured, this means you don’t have to put down a deposit as collateral. Unsecured credit cards also tend to come with better perks and rewards, lower fees and lower interest rates. Bankrate gives a great comparison between secured and unsecured credit cards against some key variables.

	Unsecured credit cards	Secured credit cards
Deposit required?	No	Yes
Minimum credit score to qualify	Usually 670+	Available for scores below 579
Average APR	Over 16 percent	APRs tend to be higher for secured credit cards
Annual fee charged?	Sometimes	Usually
Helps you build credit by reporting to credit bureaus	Yes	Yes
Are rewards available?	Yes, with many rewards credit cards	Few secured credit cards offer rewards

Source: Bankrate

In Conclusion:

Your financial journey is complex. Credit is a crucial part of it. How you choose to deal with it is entirely up to you. The more responsible and committed you are to making a positive footprint you will be at the better end of the bargain. For any unforeseen reason, if you are in financial distress it is best that you reach out to reputable credit counselors to get back on track.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

Drowning In Credit Card Debt?

Dilini — Thu, 15 Feb 2024 16:00:21 +0000

Credit card debt, is just a part of one’s financial life for many consumers, but that debt can wreak havoc on your finances! The easy accessibility of money makes it even more tempting to get additional credit cards. Due to financial emergencies, or just mere addiction to swipe, our debt counselors know getting out of debt can be challenging.

ACCC can get you the credit counseling and debt management help you need to get out of credit card debt.

Drowning in Credit Card Debt? Consider Credit Counseling!

The important thing is to have a plan for paying off that debt! When you feel like you have more credit debt than you can handle, American Consumer Credit Counseling (ACCC) can help. We’re a non-profit organization that provides debt relief services for people who need help getting out of debt. ACCC’s credit counseling and debt management programs, have helped many to pay off credit card debt.

You can always consider paying off credit cards through a debt management program such as the one offered at ACCC.

Here’s How ACCC Can Help You Get Out of Debt!

Evaluating your financial picture. An ACCC certified credit counselor will review with you all of your outstanding credit card statements, monthly bills, and other debts as well as your income. They will make a plan for how to eliminate debt – usually within five years.
Making a plan for the future. The counselor will also help you create a workable budget that you can live with and a plan for staying debt-free in the future.
Consolidating your debts. You can simplify your finances and reduce the stress of credit card debt through debt consolidation. This allows you to make one payment each month instead of many payments to a variety of creditors.
Working with creditors. We’ll work with your creditors to lower your debt by securing lower interest rates, lowering monthly payments or eliminating late fees. This will save you money and help you pay off your debt faster.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

Fundamental Money Management Skills Everyone Should Know

Dilini Dias Dahanayake — Wed, 07 Feb 2024 16:00:03 +0000

In the current world of ever evolving economic context, being knowledgeable about fundamental money management skills is very important. Having a proper understanding of concepts such as budgeting, debt and credit management is crucial to your overall financial management. Whether you’re just starting on your financial journey or looking to reinforce your money habits, understanding and implementing these skills can significantly impact your financial health.

Go through these Fundamental Money Management Skills list with ACCC to see where you need improvement.

Fundamental Money Management Skills

1. Budgeting: Your Financial Blueprint

Budgeting is the most fundamental money management skill you need to have. In the budgeting process you will need to have an understanding of your cashflow. The first step in effective money management is understanding your income and expenses. Tracking your monthly cash flow helps in identifying spending patterns and areas where you can cut back. What are your sources of income? What are your expenses? How much money is left after your expenses? Are you able to contribute to your emergency fund or savings account? Having a thorough understanding how much money is coign in vs going out can help you have a proper assessment.

Once you have this understanding you can get on with creating a budget. Apps Like CreditU has made it easy for you to get this step done with their advanced capabilities. Having this fundamental money management skill can help you prioritize your spending, track where your money is going, and ensure you’re not spending more than you earn.

Creating a budget is one thing; sticking with it is another. Consistency and discipline in following your budget are crucial for its success.

2. Saving: The Foundation for Financial Security

Yet another fundamental money management skill to have is Saving. It can be you saving for a goal or saving for an emergency fund. An emergency fund is a stash of money set aside to cover unexpected expenses, such as medical bills or car repairs. It’s typically recommended to have three to six months’ worth of living expenses saved. Your saving goals can be short or long term. It can be anything from you saving for a vacation, a new home, or retirement. Setting and saving for specific goals helps you stay focused and motivated.

3. Investing: Growing Your Wealth

This is yet another fundamental money management skill that you need to possess to thrive financially. Investing involves making your money work for you. It’s essential to understand the basics, such as the difference between stocks, bonds, and mutual funds, and the concept of risk versus return.

4. Debt Management: Keeping Debt in Check

Not all debt is bad. For example, a mortgage is considered ‘good debt’ as it’s an investment in an asset that ideally appreciates over time. On the other hand, high-interest credit card debt is ‘bad debt’ and can hinder your financial growth. Therefore, knowing what you need to do in order to manage your credit card debt is a fundamental money management skill to have. If your debt becomes out of control you do have the option of Credit Counseling from reputable organizations such as American Consumer Credit Counseling. Your knowledge on debt repayment strategies such as the ‘debt snowball’ (paying off smaller debts first) or the ‘debt avalanche’ (paying off debts with the highest interest rates first) can help you tackle your debts more efficiently.

5. Credit Management: Understanding and Improving Your Credit Score

Your credit score impacts your ability to borrow money and the terms you’ll receive. Regularly checking your credit report helps you understand where you stand and ensures the information is accurate. Improving Your Credit Scores should also be one other thing you need to focus on in money management. Timely bill payments, keeping credit card balances low, and not opening unnecessary credit accounts are some ways to improve your credit score.

6. Insurance: Protecting Your Assets

Insurance can protect you from significant financial loss. It’s important to understand what types of insurance you need, whether it’s health, auto, home, or life insurance. As your life changes, so do your insurance needs. Regularly review your coverage to ensure you’re adequately protected and not overpaying for unnecessary coverage.

Bottom Line…

Mastering these fundamental money management skills can provide financial peace of mind and a sense of control over your financial future. Remember, the journey to financial freedom is a marathon, not a sprint. Small, consistent steps can lead to significant, lasting changes in your financial well-being.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

Strategies to Help You Dig Out of Holiday Debt

Dilini Dias Dahanayake — Fri, 26 Jan 2024 16:00:10 +0000

Is your holiday debt still haunting you. We are almost at the end of the first month of 2024. And if you are still struggling to look for strategies to help you dig out of holiday debt, American Consumer Credit Counseling can help you! The holiday season, with its festive spirit, often brings joy and cheer, but it can also leave a lasting impact on our finances.

Many Americans find themselves facing the new year with an unwanted gift: holiday consume debt. If you’ve overspent during the holidays, you’re not alone. But fear not, there are effective strategies to help you manage and eliminate this debt. In this article, we will discuss practical steps including credit card debt management, enrolling in a debt management program, seeking credit counseling, and leveraging expert help offered by agencies like American Consumer Credit Counseling.

Check out these strategies to manage your holiday debt.

Understanding the Scope of Your Holiday Debt

Before you can tackle your debt, it’s important to understand how much you owe. Start by listing all your debts, including credit card balances, loans, and any other obligations incurred during the holiday season. This will give you a clear picture of your financial situation and help you come up with a plan.

1. Credit Card Debt Management

Credit card debt often forms a significant part of holiday debt. High-interest rates on credit cards can make it challenging to pay off balances. To manage this effectively:

Prioritize High-Interest Cards: Focus on paying off the cards with the highest interest rates first while maintaining minimum payments on others.
Balance Transfer: Consider transferring high-interest balances to a credit card with a lower interest rate. Some cards offer introductory periods with 0% interest.
Budget and Repayment Plan: Create a strict budget to curtail extra spending and allocate more funds towards paying off your debt.

2. Enroll in a Debt Management Program

A debt management program can be a structured way to pay off your debts. These programs, often offered by credit counseling agencies such as ACCC, allow you to make a single monthly payment, which is then distributed to your creditors. They may also negotiate lower interest rates on your behalf.

Consolidation Without a Loan: Unlike debt consolidation loans, these programs do not require you to take on new debt.
Reduced Interest Rates: Agencies can negotiate with creditors to potentially lower your interest rates and waive certain fees.

3. Credit Counseling Services

Credit counseling agencies, like American Consumer Credit Counseling, offer professional advice on managing your finances and debts. They can help you:

Develop a Financial Plan: Counselors analyze your financial situation and help you create a personalized budget and debt repayment plan.
Educational Resources: Gain access to resources and workshops to better manage your money and avoid future debt.

4. American Consumer Credit Counseling (ACCC)

ACCC is a non-profit organization that offers credit counseling and debt management services. They can assist you in several ways:

Personalized Support: Work with a counselor to assess your financial situation and develop a customized plan.
Negotiation with Creditors: ACCC can negotiate with your creditors to lower interest rates and create a manageable payment plan.
Debt Management Plans: If appropriate, they can enroll you in a debt management plan that consolidates your monthly payments into one manageable amount.

Additional Tips for Tackling Holiday Debt

Extra Income: Consider ways to generate additional income, such as a part-time job or selling items you no longer need.
Cutting Costs: Temporarily reduce discretionary spending. Small changes can add up to significant savings.
Avoid Accumulating More Debt: Try to avoid using your credit cards while you are paying off your holiday debt.
Set Realistic Goals: Break down your debt repayment into manageable, realistic goals to stay motivated.

Preparing for Next Holiday Season

Start planning for the next holiday season early. Set aside a small amount each month into a holiday fund. This proactive approach will help you enjoy the holidays without the financial stress.

Bottom Line…

Digging out of holiday debt requires a combination of smart strategies and disciplined financial management. Whether it’s through credit card debt management, enrolling in a debt management program, seeking advice from credit counseling services like American Consumer Credit Counseling, or implementing personal budgeting and spending cuts, you have the tools to overcome holiday debt. Remember, the key is to start taking action now. With patience and perseverance, you can achieve financial stability and enjoy future holidays without the burden of debt.

If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.

5 Tips to Avoid Credit Card Debt During the Holidays

Madison — Fri, 22 Dec 2023 16:00:00 +0000

Sometimes it seems like the holiday season is synonymous with credit card debt. The most wonderful time of the year is also the most expensive. How can you avoid credit card debt when shopping for gifts for your friends and family? ACCC has a few tips!

Avoid credit card debt during the holidays for a smoother new year.

Make a List

You don’t have to make a naughty or nice list, but you should make a list of which family members and friends you’re getting gifts for and how much you plan to spend on each. It’s important that you have a realistic budget when you create this list so you don’t overspend. Sticking to a list and a budget is the best path to avoiding credit card debt.

Start Saving Before the Holidays

Ideally, you should start saving for the holiday season in January if possible. That gives you almost an entire year to save up. If you save $50 a year from January to December, you’ll have $600 saved for holiday expenses! Even if you haven’t been saving over the course of the last year, it’s not too late. Cut back on expenses like takeout, entertainment, or shopping for yourself. Use more coupons when you go grocery shopping. Every little bit adds up!

Start a Side Hustle

Starting a side hustle is a great way to avoid credit card debt during the holidays. The extra cash from your side hustle means you won’t have to resort to using credit cards if you didn’t start saving early enough this year. We have a list of side hustle ideas that are safe and profitable during COVID-19!

Pay Your Credit Card Bill in Full

Normally, we advise consumers to avoid using credit cards during the holiday season and use cash only. This works great if you can shop in person at a brick-and-mortar store. Unfortunately, because of COVID-19, it is not safe to be at a crowded shopping mall or department store. That means most of us will probably be doing our holiday shopping online this year using credit cards. However, treat your credit card like cash. Give yourself a set amount that you can spend, and when you’ve spent that amount, you’re done shopping. When you get your credit card bill, pay it in full so you can avoid accumulating credit card debt.

Skip Traveling This Year

Traveling is expensive, and this year, it’s not advisable anyway. Rather than spend money on plane tickets or gas for a road trip to see family, save that money for later. Put the money you would have spent on holiday travel into your emergency fund instead. If 2020 has taught us anything, it’s that having an emergency fund is the best way to avoid credit card debt in times of crisis!

If you struggle with credit card debt, ACCC can help. Sign up for a free credit counseling session today.

How Can Credit Counseling Help Me?

Dilini — Thu, 28 Jul 2022 13:00:11 +0000

Given the tough social and economic conditions people face, many are looking for debt advice to deal with their financial difficulties. This is where you may hear the term credit counseling. So, how can credit counseling help me? Before we understand how this process is helpful in a debt management effort, it is important to understand what this concept entails. What do credit and debt counseling really do for you?

Our credit counseling services can help you in a stressful and confusing time.

What is Credit Counseling?

It is essentially a financial service that educates consumers about the possible options for paying off their debt and potentially avoid debt in the future. This process begins with a thorough analysis of their current financial condition. It then involves a discussion with certified debt counselors on the suitable debt reduction strategies to pay off and manage your financials. Further, this process will provide you a thorough education about future money management to stay away from falling into debt. So, who is credit counseling intended to help, and how?

How Can Credit Counseling Help Me?

If you are struggling with debt and trying to methodically pay them off this is potentially for you. The process can overall help you repair the credit rating and learn how to manage finances more effectively for effective financial management. People of all ages and all income levels can benefit from credit counseling.

The debt relief counseling process is more about education and offering assistance in finding the best path out of debt. If you have a lot of unsecured credit card debt, credit counseling can help you make a plan to pay it off over time. Once you connect with a reliable nonprofit credit counseling agency such as American Consumer Credit Counseling, they will guide you through a methodical process to review all of your options for dealing with credit card debt. They will also take you through the advantages and disadvantages of each option. Eventually, they can help you create a budget for yourself that will allow you to pay down your debt each month.

The critical thing to understand when you are involved in the debt relief process is that it is entirely different from debt settlement and debt negotiation services that are typically offered by for-profit organizations. The solutions offered by these organizations can more often leave you with even more debt and potentially damage your credit rating.

Credit Counseling Can Help You Get Out of Debt Faster:

The aim of an effective credit counseling program is to offer you an effective way of managing your debt and paying it off as quickly as possible. Some profit-focused organizations may offer the easy way out with options such as Bankruptcy or online debt consolidation. These may either end up doing two things. It will either end up hurting your credit rating or leave you with newer loans making it even harder to get out of the mess.

Credit debt counseling however builds a solution from the ground up by first putting together a budget and plan to pay down your debt over time. The process offered by organizations such as ACCC has close monitoring and follow up to help you stick with the plan. The commitment to help you by the organization you choose is key to continuation. Preferably you must go with a nonprofit that’s dedicated to your financial well-being rather than to making a profit. That’s why so many individuals and families turn to credit debt counseling from American Consumer Credit Counseling (ACCC).

ACCC’s Role:

ACCC is a leading non-profit organization that specializes in credit and debt relief and management. ACCC offers free credit counseling and a debt management program with fees that are among the lowest in the industry. When you reach out to a certified credit counselor at ACCC, they will help you analyze your current situation. Then they will provide a list of options to help you get out of debt. They will focus on your financial goals and seek recommendations for the problem. These solutions are customized to you and your financial situation and needs. If they see a debt management program makes sense, they will then start the process thereon. The first analysis session is free of charge for the customers and your fees will be determined based on the plan you are enrolled with thereafter. again, the fees associated with this program are the lowest in the industry.

Whilst the basic program is structured that way, the counselors are also resourceful in providing you any information and education about handling debt. They will work with you to arrive at conclusions for questions such as “What are the pros and cons of debt settlement?” and is “Debt consolidation: good or bad?”. In addition, the programs will take you through a series of educational programs and materials. This will help you learn to manage money more effectively in the future.

Therefore, debt counseling with ACCC is not only about eliminating your debt. But it is a fully-fledged process to help you and educate you to stabilize your financials and avoid any difficult financial situations in the future.

How Does ACCC’s Debt Management Programs Work?

The detailed discussions are focused on creating a plan to pay off your debt and a manageable budget you can live with while you’re on the road to a debt-free future. ACCC’s program includes proposals to your creditors to lower monthly interest rates, to re-age your accounts, or to accept a lower monthly payment.

This program helps you manage your debt more methodically by you having to only make a single monthly payment to ACCC. ACCC will disburse these payments to the due creditors upon agreed lower rates. Therefore, credit counseling with ACCC is also a means to simplify your finances and also reduce stress. When you pay your creditors dues on time it eventually cuts back on the interest and other fees helping you eliminate debt faster.

The cost of this process depends on the type of credit debt counseling agency and the services it offers. Nonprofit credit counseling firms will tend to cost less than for-profit agencies.

Choosing The Right Credit Counseling Agency to Help

You have now decided to move ahead with credit counseling and debt management. First, you must ensure you choose the right organization to deal with. It is best you choose a non-profit firm. Their priority will always be to help you get out of debt. Profitability and money-making is not their priority. You also need to do thorough research on the agency’s good standing in the industry and its history. It is best if these organizations to have been in business for at least seven years. Also, it is important that it is accredited with one of the major credit counseling associations.

In Conclusion:

Individuals facing financial difficulties experience very different situations. That’s why a credit counseling service is different than simply taking out a consolidation loan. Finding what suits your financial needs best is the key to eliminating debt. Counseling is almost always the best path for you to take in the journey. The key things you need to do in the process is:

Evaluate your current financial situation
Construct a detailed review of your income, assets, and expenses
Find personalized options based on your goals

Credit & debt counseling provides support in achieving all of the above leaving you with less worry about accumulating even bigger debt along the way. Find the right agency and the learned credit counseling professionals to help you. You will not only obtain a sound financial plan but also ample resources to educate. yourself about proper financial management. The fundamentals you learn with a credit counseling program can help you build a solid foundation for your future financial management practices.

If you are struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us.

Should You or Shouldn’t You? Consolidating Debt with Bad Credit

Madison — Tue, 15 Dec 2020 14:00:33 +0000

Debt consolidation can be a good option for consumers who are overwhelmed by high interest credit card debt. However, in order to get a better interest rate through consolidation, you need good credit. But what happens to consumers with bad credit? Should they seek alternative options? ACCC explains the pros and cons of consolidating debt with bad credit.

Consolidating debt with bad credit isn’t your only option.

Should you consider consolidating debt with bad credit?

Debt consolidation involves taking out one loan to pay off multiple unsecured debts. This loan usually has a better interest rate than your credit cards, so it saves you some money. As with any other loan, you get a better interest rate on the loan if you have good credit score. If your credit is below 700, you may not get the best interest rate. You may not even get approved at all. Because of this, you should probably look into other options besides consolidating debt with bad credit.

Debt Management Plan

There are alternative options for those who have bad credit. Technically, consolidating your debt with bad credit isn’t impossible. One of the best options that doesn’t require a good credit score is a debt management plan. A debt management plan works like debt consolidation in that it combines all of your unsecured debt into one monthly payment. However, it is not a loan. There are also no minimum credit requirements. A debt management plan is administered by a nonprofit credit counseling agency, and they negotiate with creditors to get you lower interest rates and waived fees. Clients in a debt management plan with ACCC can get out of debt in five years or less.

Debt Payoff Options to Avoid

Some options for paying off debt do more harm than good. Debt settlement is one such option. When you settle your debt through a debt settlement agency, you don’t pay off the principal amount. For example, if you owe $10,000 in credit card debt, a debt settlement agency can negotiate with the creditors so you only have to pay $7,000. This can seriously damage your credit score. If your credit wasn’t good to begin with, you could have a very hard time building it back up again after debt settlement.

Additionally, the $3,000 that you supposedly saved by settling can be counted as income by the IRS and can increase your taxable income for the year. Debt settlement agencies also charge high fees, so in the end, you probably aren’t saving any significant amount of money.

Final Thoughts on Consolidating Debt with Bad Credit

Consolidating debt with bad credit may not be possible through a traditional debt consolidation loan, but instead through a debt management plan. A debt management plan can help you improve your credit score as you pay off your debt. When you finish the debt management plan and have a better credit score, you can rest assured that you will get good interest rates on any future loans and lines of credit. Just be sure to use credit responsibly!

If you struggle to pay off debt, ACCC can help. Schedule a free credit counseling session today.