Why I didn't use Credit Counseling...

to get out of debt.

About a year and a couple months ago, I made the decision that I was going to get out of debt. The only thing was, I didn't know quite how to do it. I knew there was a Credit Counseling office a few blocks away so, on a day off, I went in.

I met with a gentleman who had the title 'Financial Counselor' listed on his business card. We went into his office, and for the first time, I told someone about all of my debt. I had explained to my mother some of my debt, but didn't want to overwhelm her with all of it.

When we were done though, I decided I needed to 'think about it' before signing up. Ultimately, I didn't choose to get out of debt through credit counseling, and here's a couple reasons why:

1. I didn't like being charged extra - When I went into the credit counseling office, I initially thought 'hey, this is great' that is until the F.C. brought up the $30 month fee for using the service along with a '$50 1-time set up fee" - that's right they wanted to charge me $80 from the word 'go' to get out of debt. I thought I could do better. I did and saved about $500 in the process...
   
2. I was too impatient to get the debt paid off - After doing all the calculations, the financial counselor found my debt to be $18,830.64 at the moment I stepped into his office. When one calculated the $560 monthly debt payment he suggested, I would be debt free by 'August 21, 2009' after only 40 monthly payments.
   
3. I didn't want my credit cards canceled, just paid off - I knew from a little research beforehand that by canceling my credit cards I would not exactly help my credit score. SO when the F.C. suggested that by using their system they would effectively 'freeze' my credit and only pay on the remaining balance I became more concerned. Also, while in this freeze mode, the best interest rate he could promise me was around 11-13% - as opposed to 0% which I was shooting for.
   
4. I figured I could do it myself - Ultimately, I just felt like something was slightly up when I was going through the budgeting process with the F.C. and he kept assuming my budget for different monthly things should be pushed upward because 'most people' have a budget of '$XYZ'. For example, as I look at year and a half-old packet, he had a category for 'work lunches' & a category for 'grocery expenses' that totaled $450 a month! Currently, I spend about $80-$150 monthly on both categories combined. But I guess I'm not 'most people'.
   

Given these as well as other reasons I just figured I wanted to get out of debt faster, pay less and have the satisfaction of knowing I had control of my life. I think I accomplished all of these goals.

Credit counseling is a great resource though, for those who just can't trust themselves with credit cards. One especially beneficial thing I did take out of the credit counseling experience was the importance of budgeting - The Financial Counselor did make out a very itemized budget of everything I was spending each month. This woke me up quite a bit and showed me where the 'leaks' in my budget were and what I could afford to cut in order to tackle the debt.

One thing's for sure, paying off my debt in just over a year felt a whole lot better than waiting three years & three months to get out of debt.