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Which Credit Card and Debt Consolidation Counseling Service is Best? Questions to Ask BEFORE Signing a Contract!

Updated on February 14, 2010
Say goodbye to overdue bills! Get your finances in order today!
Say goodbye to overdue bills! Get your finances in order today!

So, you are in debt. You have credit card bills coming out of your ears and you've had just about enough. Admitting that your current financial situation is out of control is the first step towards a debt-free life!  Congratulations! Admitting that you are over your head and in need of help doesn't make you any less of a person…in fact...asking for help is a very noble thing to do. After all, even the most fiscally responsible people need a helping hand now and again! Now that you are ready to contact a reputable credit card counseling service it is time to make a list. A list, you ask? What type of list? Well, in order to find the service that best fits your particular needs you will need to ask several questions. After all, you don't want to waste your time or money…do you!? Wasting money is probably how you ended up in debt in the first place! Harsh…but true.

After you have put together a list of credit card counseling agencies that you wish to contact, it is time to make some phone calls. It is very important that you ask the questions listed below BEFORE you sign any paperwork or pay any fees. By the way, a GOOD credit card counseling service will charge very little for their services. BEWARE of counseling services that charge you an arm and a leg as they are probably NOT reputable!

Some states require their credit counselors to be licensed.
Some states require their credit counselors to be licensed.

Questions to Ask!

The first question you should ask is – Are you a federally approved, nonprofit, tax-exempt credit counseling agency? This question is very important as it goes back to what I mentioned before about non-reputable agencies charging you an arm and a leg. It is a fact that non-profit agencies will charge you MUCH less for their services. It is very important that you don't fall into a "trap" and sign on with an agency that appears to be a non-profit…when in reality; they are a FOR PROFIT business (kind of like a wolf in sheep's clothing!). One way to make sure that the agency you are dealing with is in fact a non-profit is to ask for a copy of their IRS approval of non-profit status letter. If they are truly non-profit…they will have no problem handing over the document.

The next question you should ask is "What services do you offer?" It is very important that you obtain a list of services before signing any paperwork. After all, you want to make sure that they can, in fact help you with your particular financial problem. The financial counselor assigned to you should be able to provide you with a "list of services" rather quickly. Now…on to the next question!

Do you have a license to offer credit card counseling services in my state? Some states license their credit counseling services (and agencies) while others don't. It is important to find out what the rules and regulations are for the state in which you live. In order to find out if your state does require licensing…all you have to do is contact your state's attorney general's office. They should be able to give you the information you are looking for.

How do you charge for your services? As I mentioned before, most reputable credit counseling agencies will charge very little for their services. Most agencies will charge you a small administration fee one time per month (for as long as you are using them). The fee is usually nominal…around $20 to $40. Be wary of agencies that charge you little up front…and then hit you with a ton of small fees down the road (that's what I call shady business practices!).

Finally, the last two questions you should ask are…

How will the credit counseling agency store my personal information? Will it be secure? This is a VERY important question to ask as you DO NOT want your information out there for the world to see! Make certain that the agency you choose to deal with has strong securities measures in place (after all, identity theft is on the rise and is only getting worse!).

Last but not least…ask to see a copy of the contract BEFORE signing it. Read every word and make sure to ask questions about anything that does not make sense or is unclear. A reputable credit card counseling service will be happy to sit down and answer any and all questions you may have.

So there you have it…questions to ask BEFORE signing on with a credit card counseling agency. Again, give yourself a pat on the back for finally taking the first step towards financial freedom! Though it may take some time to get your finances in order the wonderful feeling you will experience once you are debt free will be second to none! Good luck!

Have a few minutes to spare? Please read some of my other HUB Pages! Thank you!

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