Consumer Credit Counseling companies were first established in the 1980’s when credit card companies began to notice that many people were having problems making their minimum monthly payments. At that time, if a consumer couldn’t afford to pay their entire debt, there were very few options to get financial relief (except for filing bankruptcy) so the credit card companies helped to establish Consumer Credit Counseling (CCC) organizations in order to recover their money from people struggling to make ends meet. Acting as separate organizations from the creditors, they were able to put on a friendly face and claim they were established to help the consumer.

You will find CCC companies labeled as Consumer Credit Counseling, Debt Consolidation, Debt management or “Make Only One Payment” Companies. Many also claim to be non-profit although they all charge you a fee for their service. Besides the nonprofit or not-for-profit Consumer Credit Counseling companies there are also companies that call themselves Debt Consolidation Companies because of the bad reputation of some consumer credit counseling companies. This can be a little misleading because these companies do not make consolidation loans. Consolidation, in this case, refers to the act of “consolidating” your many payments into the one payment you pay to their company—just like any other CCC company.

The main function of Consumer Credit Counseling is to have you consolidate your debts and pay one payment to them that they then pay to your creditors. A good Consumer Credit Counseling Company will help you by negotiating a lower interest rate and possibly getting late fees waived. In the end though because of their affiliation with the credit card companies, they do not negotiate your balance and most of what they do is for the benefit of the creditor, not the consumer.

So basically these CCC organizations work for the creditors—not you—just like a collection company. In addition to what the creditors pay the CCC company, they charge you a monthly service fee for dispersing your money to your creditors. The creditors pay a commission to the CCC for successfully collecting the debt.

The main pitfall in CCC programs and the main reason for failure in this type of program is that your monthly payments are usually going to be higher than your original minimum monthly payments AND you are going to have to make that payment for many (4-6) years. If you are already having problems making your minimum monthly payments now, how are you going to afford a higher amount over a period of many years? Approximately 65–70% of the people who enter a CCC program are unsuccessful and drop out before the program is complete.

This type of program can be effective for people who want get out of debt and can afford to make slightly higher monthly payments for the next several years and those who do not have too much debt. If you can continue to pay the higher monthly payments and do not foresee future financial problems, this is an O.K. way to go. If you are currently struggling to make minimum monthly payments, however, the odds are not good that you will not succeed using this method.

One of the biggest misconceptions is that enrolling in a CCC program will protect your credit. But any type of debt management/consolidation/settlement/repair program is going to have an impact on your credit. There is no way around it except to make all of your payments in full and on time. When you are accepted into a CCC program your creditors will close your accounts and report this to the credit bureaus. Additionally, nearly all creditors will report to the credit bureaus that you have entered into a “hardship” program and need help. Although this is far less damaging than bankruptcy, it definitely does impact your credit rating—don’t let anyone tell you otherwise!

We all love credit cards. The ease, convenience, and to a certain extent the protection it provides in making a purchase. But with the good can also come the bad if you’re not careful. It’s far too easy to end up with too many cards and making too many purchases. Here are some revealing facts about credit card spending and habits in the United States.

There are roughly 1.2 billion credit cards in use in the United States.

About 24 percent of all personal expenditures in this country are made with credit and debit cards.

A typical credit card purchase ends up costing 112 percent more than if cash were used.

A $1,000 charge on an average credit card will take almost 22 years to pay, and will cost more than $2,300 in interest ($3,300 total) -- if only 2 percent minimum payments are made.

About 60 percent of active credit card accounts are not paid off monthly.

This may all be getting worse for Americans as some credit card companies are actually raising interest rates to many of their customers increasing the minimum payments due each month and extending the time it will take to pay off the debt.

If any of this sounds familiar to you and you might be struggling to pay off some of this debt, there are options available. No one intends to get themselves into debt and certainly not to the extent that they cannot pay it off in a reasonable time, but it does happen. If you want to get out of debt and get your finances back on track, debt settlement can help.

How many credit cards do you have? Chances are, more than you actually need. You probably have one that offered you “miles”, one that offered you discounts at their store, and several others that “offered” something appealing at the time. Millions of Americans receive "pre-approved" credit card offers in the mail every day. If you have less-than-perfect credit or are swamped in debt, you probably still get the offers in the mail. And if you are in debt, they may seem like the answer. But more than likely, they are the problem.

On average, Americans receive eight credit card offers through the mail each month regardless of his or her credit history. It has become a trend for creditors to offer their cards to all consumers, especially those with credit and debt problems. They know that poor credit habits in the past will cause the consumer to spend more money with their card. Only after the consumer has amassed an enormous balance do they realize that they can only afford the minimum payments. This will in turn accrue plenty of interest charges and other fees, making huge profits for the creditor. Last year, the credit card industry took in over $43 billion in card fees.

But you can break the cycle and get yourself back on track. Using your Visa to pay your Mastercard (or vice-versa) is not the answer. Getting your debt under control is.

The average credit card debt among people who have at least one card is $9,205 -- triple what it was in 1990. People using credit cards in fast food restaurants spend up to 50 percent more than when they pay cash. The average interest rate on credit cards is 18.9 percent and the typical American family today pays about $1,200 annually in credit card interest.

If you are finding it increasingly harder to pay your monthly credit cards bills, it's time to take action. First thing is to stop using your cards while to try to pay down your balances. Take all your credit cards but one out of your wallet and use that one ONLY for emergencies. It will take some discipline but it's important to stop charging while you try to pay down your balances.

But if you have too many cards and your payments are too high to manage or pay off on your own, debt settlement may be exactly the program to help you get out of debt!

America is a nation in debt. We love to buy and the mass marketers spend millions every year trying to convince us that we need the newest, biggest, and best of whatever it is. They guilt us at Christmas into “keeping the retailers happy". But in the end, not everyone can pay all that debt off.

Studies show the average consumer is exposed to more than 3,000 marketing messages every day. In the last decade, it's been estimated, solicitations jumped from 1.52 billion annually to 4.29 billion.

The credit card companies really don’t care if you ever pay off your cards. In fact, they prefer you don’t. They make billions, yes with a “B” every year on interest. Last year, the credit industry made $43 billion in interest. If you pay that debt off, their income goes away.

Late last year, revolving debt — an estimated 95 percent of it from credit cards — reached a record high of $943.5 billion, according to the Federal Reserve. The annual growth rate of this debt increased steadily in 2007, reaching 9.3 percent in the last quarter, up from 5.4 percent in the first quarter.

The amount of debt that is delinquent — in which minimum payments are late but the accounts are still open — also appears to be on the rise. The Federal Reserve found that 4.34 percent of the credit card portfolios of the 100 largest banks that issue cards was delinquent in the third quarter of last year, up from 4.07 percent in the previous quarter. Charge-offs — accounts closed for nonpayment — also grew in that period, and banks expect charge offs to continue rising in 2008.