As we finally begin to see signs that the economy is improving, at the same time credit card counseling services continue to see growth as consumers struggle with debt. It is now a widely held belief that credit card debt amongst American consumers has now reached $1 trillion. That astronomical figure was unimaginable just a decade ago. But now it is reality.

Many credit card companies have stopped issuing cards to consumers altogether unless they have absolutely pristine credit ratings, which not too many people have. As I'm sure you remember, it seemed like just yesterday that we were all bombarded with solicitations everywhere we turned. We couldn't turn on the TV, open our mail boxes, or read a newspaper without seeing sales pitches from the major credit card companies.

It is pretty amazing when you stop to think about how quickly things have changed. Now there are over 1000 credit card counseling services available in the United States working with over 400,000 consumers who find themselves no longer being able to afford to pay their credit card bills.

The problem will more than likely get worse before it gets better too. With the new credit card reform legislation the issuers have raised interest rates on millions of cardholders prior to the new laws going into effect. What this will result in, I believe, is more and more people will go into default and declare bankruptcy because they will not be able to afford to make the higher payments on their monthly balances.

And that is where we will really see the credit card counseling services take off in popularity. The credit card companies certainly do not want to see anyone go into default or bankruptcy because they will get nothing. They will however be willing to negotiate with consumers to lower interest rates for those that want to do the right thing and pay off their debt but are truly struggling.

Basically these organizations use their pre-existing relationships with the banks and card issuers to negotiate lower interest rates. At the same time they offer counseling services to the consumer to educate them so that this situation will not be repeated in the future. By the way, credit counseling and debt consolidation services are terms that are pretty much synonymous and used interchangeably so don't be confused by that.

Consumers that go into these programs will work directly with a representative that will negotiate with their creditors on their behalf and also make sure that counseling sessions are set up to identify exactly how the debtor came to be in their present situation and more importantly, how to avoid it in the future.

When consumers enter into an agreement with credit card counseling services their debt is consolidated into one monthly payment which the debt consolidation company collects and distributes to the various creditors. A program will typically take 4 to 5 years to complete. While the program is going on the consumer will no longer have an open line of credit. They will in effect be taken away from them and their accounts will be closed.