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Ask The Experts: Credit Myth Debunking

Q. I have been getting calls from credit counseling agencies claiming that he can lower my rate and payments. I have never been late so i wander why would the credit card company lower my rate. The agent seems doesnt seem fully transparent. What's in it for him? By resturcturing my card balance would it affect my bureau? --Bushra

Q. What is your opinion on credit card protection programs offered by the credit cards? Example, lose your job, we'll make your payments... --Adam

In answer to you both, here's some credit debunking: Legitimate credit counseling agencies don't call you directly unless you've already reached out to them (a good don't-call-me, I'll-call-you-situation). Stay away from these solicitors. They are looking to make big bucks off of promising to help you with managing your debts. Not only will you be out some big money, but you may also take a big hit on your credit score and credit history, depending on what they try to do with you and your accounts.

Instead, if you really need help, YOU make the call to a non-profit credit counselor and you can find one near you through the National Foundation for Credit Counseling. Now when it comes to credit card protection plans, I am not a fan. Though you may feel that the chances of you losing your job are high, the credit card company is betting on the reality that the fear outpaces the actual numbers. Instead of paying a credit card company a monthly fee for this service, pay yourself a 'fee' every month by paying off and down that debt and then saving more cash in an emergency fund. That is the best insurance you can buy yourself. Keep the money in your pocket, not theirs.

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Carmen Wong Ulrich is the host of On The Money