National Foundation for Credit Counseling (NFCC) is a national non-profit network of 1,450 Financial Wellness CentersTM created with the help of financial institutions to help consumers with personal finance problems. This is to the advantage of all parties since it is in the interests of creditors to have their debtors resolve their credit problems in sensible ways which lead to repayment of debts to the respective creditors.

The NFCC provides a wide range of counseling and education services through national centers as well as several local accredited institutions. Through its Financial Wellness NetworkTM, the NFCC has been offering low-cost assistance to people in difficult credit-related situations since 1951. These Independently Accredited Financial Wellness CentersTM undergo a strict independent accreditation process through the Council on Accreditation of Services For Families and Childern, Inc. (COA). Financial Wellness CounselorsTM are certified consumer credit counselors. Services are provided free or at minimal cost to consumers.

The range of services provided by the NFCC includes money management education, confidential budget, credit and debt counseling and repayment plans as well as homebuyer education and mortgage programs. For each of these, counselors provide in-depth, thorough appraisals of a client's situation as well as establishing immediate priorities and long term goals. The NFCC and its institutions deal directly with creditors acting as an intermediary between the client and the financial institution. Help from the NFCC is available in a number of different ways. You can contact the closest NFCC accredited institution closest to you by phone or online, or even use the resources of the national center itself. Both the latter and a number of local institutions provide Internet counseling.


Online: The NFCC Website:
http://www.nfcc.org

For more information. Also use the online search function to find the closest local help center to you.

By Phone: National Toll Free Crisis Hotline: 1-800-388-2227 Locate the Financial Wellness Center in your area or receive Online Counseling.

A Nationwide NFCC Center For Internet Counseling:


Personal Debt Solutions
10000 N. 31st Avenue, Suite C-200
Phoenix, AZ 85051
Appointment #: (888) 373-1737
Website: www.personaldebt.org
Counseling provided 24 hrs a day, 7 days a week.

The basic difference between the two types is that an unsecured credit card does not require you to put up a security payment, deposit or collateral of any sort. Your qualification is usually based on your financial history and status and the issuing company's determination of your ability and likelihood of making payments on time. The secured credit card does require a security deposit. This option is usually for people with imperfect credit histories or with credit and debt problems of substance. This generally means that secure credit cards can be expected to have relatively high interest rates. A few specifics:

Unsecured Credit Cards:

The two most popular types are VISA ( The Largest ) and Mastercard. The former is a creation of the Bank of America while the latter is an evolution of a conglomerate of California Banks. Neither of these companies actually issues you a credit card. This is the province of the specific bank or financial institution you get your card from. As such, each bank sets its own rates, fees and payment policies. This produces a degree of variety in services, but there are a number of common features obtainable from most credit card issuers. See more on this topic below and at: Credit Card Advantages and Disadvantages.

Unsecured Credit Cards:

Most companies will issue unsecured credit cards to credit worthy customers based on their credit history and earnings potential. VISA and Mastercard are the two most convenient cards since they are accepted at the most establishments. American Express is accepted at fewer places because of the rates at which they charge merchants for their services.

The requirements for qualification for a credit card differs from company to company, and within companies, different types of cards may be offered based on a customer's financial details. It is common for companies to charge relatively high interest rates ( some percentage over the prime rate ) for customers without the most favorable qualities. A number of credit card companies are now charging no annual fees for credit card accounts and this seems to be spreading. A common marketing feature and incentive is the low introductory annual percentage rate which a number of companies will offer new customers. Customers must understand that these rates have limited duration and it is adviseable to find out how long the introductory rates last until the fixed annual rate kicks in. This information is usually readily available from the issuing company's website or application package. Read the fine print.

Keeping up with your payments and understanding the duration of your payment grace period is also adviseable. The great risk of lax management of a credit card is that late payments can initiate a number of punitive fees which can cause interest rates to skyrocket. It is therefore crucial that you pay attention to deadlines and keep track of your account figures. Unsecured credit cards come with credit limits based on the type of account. The best qualified candidates receive the highest credit limits.

Secured Credit Cards:

These are sometimes called secure credit cards, although this is -strictly speaking- an error. As noted above, the Secured Credit Card requires a deposit with the issuing bank. This amount, to secure a credit card, is usually only in the hundreds of dollars. It is held as collateral while the bank issues credit of some percentage of the deposited amount often 100%. In many cases, the card is reported to the credit bureaus as a normal (i.e. unsecured ) credit card. This allows the cardholder to establish a positive credit history over the duration. Based on good payment history over an extended duration, some banks will then issue the customer an unsecured credit card. Secured credit cards are often a tool for debt consolidation and credit repair programs. There are a number of such companies online.

Credit Card Debt

Americans now incur more credit card debt than they ever have before. In fact, Americans now incur all foms of debt at record rates. It is important to distinguish between kinds of debt. There is debt which can prove useful and lead to prosperity and there is debt which is ususally detrimental to one's financial health.

Credit card debt in particular can be crippling and is an example of debt detrimental to your financial future. Credit card companies usually allow you to pay a fraction of your outstanding bill as a minimum amount every month. However, interest on any outstanding balance which is carried over past its initial grace period accrues. Paying only the minimum amount therefore increases your credit card debt burden at the astronomical rates inherent in most credit card agreements.

One must not be deceived by high credit limits on certain types of credit cards. If not exploited wisely, higher limits can tempt you into getting into even deeper credit card debt and digging a hole you will have great difficulty climbing out of. You are much better off paying your outstanding bill in full every month and reigning in your spending.

As a general rule one must never use credit cards to incur detrimental debt and have to pay interest on it. Examples of this kind of debt are that used to purchase consumer items such as food, entertainment, clothing, etc. These are not items which retain their value. They are not investments which increase in value to offset the credit card debt incurred.

Examples of useful kinds of debt include loans for education, investment and purchases of real estate. Credit cards are not the ideal way to get this sort of credit. Many people are tempted by the possibility of transferring their debt balances to a different credit card account with a lower interest rate. This sounds good in theory but can be very difficult to achieve in practice.

Credit institutions run credit checks on consumers before offerring accounts. A large unpaid balance on another credit card is bound to show up on such a check. Credit card companies are unlikely to desire such a customer for an account. Certainly not at an interest rate overly favorable to that consumer, considering that such a consumer is a high credit risk. If you have undisciplined spending habits, you should actually consider reducing your credit limit rather than increasing it.

Although most banking institutions charge a transaction fee on them, debit cards can be a way of restoring some discipline to your spending habits. Keep a debit card and consider using these for certain items to make sure that the item is payed in full directly out of your bank account. Debit cards are generally accepted wherever credit cards are accepted.

For those already in deep credit card debt, there is help. Credit card debt consolidation offers are now very common and several such companies are online. There is a distinction between debt consolidation services and debt consolidation loans. With the former, the company acts as an intermediary between you and your creditors, helping you to create a monthly payment plan to eliminate your debts.

The latter involves a loan for which you must provide equity, usually your home and is a much riskier proposition. Credit card debt services are sometimes funded by issuing banks . This is because it makes sense for the banks to maintain services which help them retrieve -at least- some portion of debts owed to them by consumers.