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Date June 27, 2009

Debt Laden Consumers Find Ready Help With Credit Counselors

Saddled with financial burdens ranging from home loans to credit card debts, American consumers are now frantically looking for the best and the quickest way to get out of debt and repay loans. Otherwise, they face the unenviable prospect of declaring bankruptcy or losing their homes.

Debt Laden Consumers Find Ready Help With Credit CounselorsThe problem is that some American consumers just don’t know where to turn to. Many of them recognize that getting themselves out of their financial dilemma needs more skill than what they have. They just don’t know where to turn to for the particular set of skills that they need.

One particular helpful group of people who can help American consumers untangle their finances are the credit counselors. Credit counselors are people who specialize in helping the average American consumer burdened with debt to find ways to make paying off their debts easier.

Michelle Jones, senior vice president of Consumer Credit Counseling Service of Greater Atlanta says, “We help consumers create a lean, sustainable budget that will support the family’s housing costs”.

In fact, Consumer Credit Counseling Service of Greater Atlanta is just one of the many credit counseling groups across the U.S. who are helping American consumers get their financial act together and keep themselves afloat amidst the threat of debts, loans and the current economic depression.

Credit counseling groups have plenty to offer debt-ridden American consumers. A visit to a credit counselor will usually mean a full review of the consumer’s debts, income and expenses. By analyzing their client’s financial details, credit counselors can form an exact financial picture and see where money is leaking out and where money can be saved. They can then suggest ways for the client to save up and get their finances back on track.

Another important service that credit counseling groups offer their clients are loan modifications and debt payment plan negotiations. These offers often depend on how good the monthly income of the client is. Usually, the higher the monthly income, the better the chances for a client to have a loan or debt renegotiated.

With the current economic climate, getting out of debt is a major priority for every American consumer. Credit counseling groups offer one of the most helpful and genuine credit help services for them. Credit counselors often offer very low costs for their services. However, like any financial arrangement, American consumers should first check if the group that they are dealing with is actually legitimate.

Date June 8, 2009

What Good Credit Actually Means When The Credit Card Bill Goes Live

Consumers heaved a sigh of relief when, last May, President Barack Obama signed into law the credit card bill which was fast tracked through Congress and released also this May. Consumers are seeing the credit card bill as a great equalizer which will give them better control over their credit and curtail the unfair and abusive practices of credit card companies.

What Good Credit Actually Means When The Credit Card Bill Goes LiveHowever, credit industry insiders are warning that the credit card bill may not be as consumer friendly as it sounds.

For the past years, credit companies had been profiting greatly, expanding available credit without taking into account the rising debt of cardholders and profiting mainly from high interest rates and large fees instead of debt payments. When the economic crisis hit, the credit industry found itself in a financial dilemma, burdened with toxic assets and increasing defaults. As a way to salvage what they could, they raised interest rates to astronomical levels and increased fees.

With the credit card bill in place, cardholders are hoping that things are going to change for the better for them, credit wise. However, if credit industry experts are to be believed, their sense of relief may be misplaced.

While the credit card bill does provide legislation which will make credit card practices less predatory and more consumer friendly, these same legislation will also mean that credit cardholders are going to have to deal with credit that is harder to get. For instance, the legislation limiting the capabilities of credit card companies to adjust interest rates of an existing debt means that credit card companies are going to be offering higher interest rates at the very start. It won’t matter either how good of a borrower the credit cardholder is.

Credit card companies see adjusting interest rates on an existing debt as a way to adapt the specific credit line according to the risk exposure of the cardholder. Without this capability, they say that they have no other choice but to spread their risks across their customers, regardless of risk. What this means is that, if a one cardholder is not able to pay the interest rate commensurate to the risk that he or she poses for the credit company, then all the other customers of that company have to pay a higher interest rate as a result.

Whether this scenario will actually happen or not still remains to be seen, cardholder advocates counter. Credit cardholders are getting smarter about managing their credit and, with the disclosure amendments in place, they can make much more intelligent decisions. Competition among credit card companies is another factor in their favor as well.