Ok before I jump on one of these plans like Ameridebt or CCCS. What really happens to my Credit? I rather ask the common folk before I ask the people who actually run the program.
I’m using CCCS to help with my credit card debt. I think it’s great. They can negotiate deals with most creditors wherein you get a lower interest rate and they knock of the persistent late charges. Also, they’ll automatically debit from your bank account every month so you don’t even have to think about it.
I don’t know about Ameridebt, but CCCS is pretty cool.
Credit is evil. Too bad it’s so necessary.
short reply:
When you sign up with the credit card counseling program, the program is listed on your report for seven years. So it will affect your credit rating. But how long does a bankruptcy stay on your credit report?
longer reply:
I went in for an interview myself after I got my Master’s and was looking for a job in my field. But I found one, so didn’t use the service.
The companies are non-profit and are subsidized by credit card companies, who would rather be paid slowly than have you file for bankruptcy. You pay a one-time setup fee of $30 and around $20 a month for administrative costs-- it’s not a whole lot. The counseling service will negotiate with your various credit card companies to lower your monthly payments &, I think, your Annual Percentage Rates…If you are really in debt with no chance of a big raise in sight, it’s a chance to clean up your finances.
They also generally recommend that you cut up your credit cards.
Bankruptcies stay on your report for 10 years; yet you can file every 6-7 years.
My husband and I tried credit counseling. Bunch of BS. I could not afford the payments, plus we were still getting socked with late fees and everything. The one we were with was supposed to lower our payments after 6 months, they didn’t do it. So you can guess what our next course of action was…
Never used it myself, but my daughter and her husband did. They used CCCS and it’s not really that great. They signed up with the one in Reno (because they lived in South Lake Tahoe Ca) and that was the one in their area. Later they transferred to central CA but could not get the account transferred to the local one. CCCS demanded Postal or Amex money orders only, every two weeks for 1/2 your monthly payments. CCCS was only able to secure a moratorium on about half of the credit card companies. Wells Fargo was the worst and would not waive the fees. I don’t know if they’ve ever got Wells Fargo off their credit report.
I imagine some are good, but I really wouldn’t trust the ones that advertise on TV (and there are a bunch). Also be very wary of anyone promising credit repair most honest people will tell you there ain’t no such animal. Best credit repair is establish good credit…and that takes time.
CCCS is probably the best of the bunch. There are others, but I don’t know them offhand.
We are using ACCC and its working out well. IIRC (hedra did the research and set up the account) you provide them with your accounts and they can determine what your payment will be. I believe that it is negotiated with the card company (all of our debt was credit card). Some card companies, such as American Express, will actually raise your interest rate (this is memory not researched fact) so they advised us to pay that one off ourselves. You also have to cancel all of the accounts that you put under their management, so if you still want to have a credit card, you have to handle that one yourself. ACCC uses direct withdrawl, and except for a couple of months where the withdrawl didn’t happen and they didn’t tell us that they didn’t pay the companies, its been OK.
The interest rates do generally decrease when you are using a credit counseling company, so that is what we are paying them for. Otherwise you could just cancel the card and pay them off yourself.
My wife and I were using a company called KCCA. They made a lot of promises like getting the interest rates down and getting us a better credit rating and whatnot.
It turns out, like epeepunk said, that Amex raised our interest rate. We kept getting hit with late charges as well because KCCA would only pay on their schedule and not on the credit card companies’ schedule. Then we had to pay KCCA two payments up front, one to go to the credit card companies, the other was supposed to be refunded when we were done paying off the credit companies. That little tidbit of information didn’t come up until we were all signed up and ready to go. Also, we were getting to the point of not being able to afford the monthly, so we figured that we’d get a home equity loan, lower interest than most of the credit cards and tax deductible to boot. Most loan companies gave us problems because of the credit counseling, but we were able to find one company to work with us.
Since we got the 125% equity loan, we were not eligable to get the low intrest rates, but 11% is still lower than most of my credit cards, especially after KCCA. So the credit report shows that we owe the credit card companies, not KCCA. The loan officer will only make payments to the credit card companies and not KCCA. Well, now I remind you of the two payments we made up front, specifically the one that we were supposed to get refunded when we were paid up. Well, it seems KCCA has a policy hidden deep in their paper work that specifies that ALL payments must be made through KCCA otherwise you forfiet the refund. In our case, that was $1200. $1200 gone. Out the frickin window because we paid off the credit card companies without going through KCCA.
If any were to ever ask me again, I’d say go with a loan if you can. Especially with the current interest rates.
Oh yeah, we told KCCA we’d do this every chance we got:
KCCA SUCKS!!!