History

• The first credit counseling agencies, the National Foundation for Credit Counseling (NFCC), were set up in 1952 in the Unites States. The official objectives of the NFCC include the promotion of financial literacy and proactively assisting consumers to avoid bankruptcy. The first local credit counseling franchises emerged in the 1960s and offered financial education and counseling directly to customers. In direct competition to the NFCC, a rival organization called the Association of Independent Consumer Credit Counseling Agencies (AICCA) was founded in 1993.
  
  

Mediums

• With the arrival of AICCCA, there were two firm mediums established for delivering debt management information and advice. The AICCCA favored the use of telephones over the cost-intensive, face-to-face model, which was what consumers subscribed to given the established practices of the NFCC.
  
  During the latter half of the 1990s, with the growing popularity of the internet and other more effective mediums, both rivals adopted the best practices of each other along with other mediums popular with consumers.
  
  

Target Customers

• People who are able to pay their bills and are current on their accounts don't need credit counseling regardless of the local counseling agency's agenda. It is, however, advisable to understand your finances and seek financial education to empower you to make better decisions about your money. The primary target audiences of credit counseling services include those who cannot afford minimum payments on their credits cards, who consistently make late payments on their dues and those who are troubled by creditors/collection agencies
  
  

Advantages

• The advantages of understanding your finances through financial education include being prepared for unforeseen like health emergencies, saving for lean periods like the ongoing global recession, better credit rating and creating firm investment plans. It helps to secure lifestyle standards within a budget and with an investment plan in place.
  
  

Note of Caution

• Before choosing a credit counselor, remember to read carefully between the lines of the agreement to ensure you're protected from spiraling further into debt. Legitimate credit counseling firms need to be affiliated to NFCC or AICCCA. Bear in mind that any firm that charges an initial fee higher than $10 should provide extensive personal money coaching services; if the firm is making extravagant promises for a lower fee, it may not be legitimate.