Oct 9, 2008 4:00 pm US/Pacific
Credit Counselors Say Budgeting Is #1 Need
Reporting
Sue Kwon
SAN FRANCISCO (CBS 5) ―
Every one of the callers to the ConsumerWatch credit hotline is facing a financial crisis. But according to our counselors, the problem isn't a big Visa bill.
"The credit card debt is really secondary. The reality is that they can't even afford their living expenses," said Rico Delgadillo of
Consumer Credit Counseling Service (CCCS) of San Francisco.
Before you can knock down your debt, you need to get on a budget.
"Look at potentially where money is going and where to make some changes. From there, definitely contact your lenders directly to see what they can do to you help you out," said Chris Seto, another counselor at CCCS.
If your spending is out of control, see a certified credit counselor. Choose a non-profit that offers free budget planning.
And avoid common credit scams. A legitimate credit counselor will never cold call you, and they won't offer to settle your debt for pennies on the dollar. Debt settlement companies may not forward your payments to creditors, making your situation even worse.
If consumers take decisive action now, they can avoid bigger problems later.
"If they don't make some changes quickly to their income or to their situation, they're going to be faced with a scenario where they aren't going to be able to afford their rent," said Delgadillo.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)
