If you do decide to use a credit counseling agency, take the time to shop around for one

Get Credit Counseling Help

Consumers who are in financial distress can get help from credit counseling that is done well. Also, families who need to plan a budget can also find help from credit counselors. These agencies have traditionally offered a variety of services and products, including things like community education, budget counseling, and financial advice. They also offer debt management plans, known as DMPs, but consumers should be aware that the credit counseling industry is not perfect. There have been some serious problems with some of these agencies, including poor advice, unnecessary fees, and even using deceit to gain customers.

Not everyone can benefit from credit counseling. You should evaluate all the choices you have to resolve your financial difficulty before you enter a credit counseling program. You can always work to develop a better budget and savings plan, or even negotiate with your creditors on your own. If your situation is serious, declaring bankruptcy is an option to consider.

If you do decide to use a credit counseling agency, take the time to shop around for one. Many companies who advertise on television or online are not actually credit counseling companies. They are actually companies known as credit repair companies. If you work with them, you will find that you are charged high fees for things that you could be doing yourself without any help. Talk to your friends and family members to get referrals. Also, check with the Better Business Bureau or your state's Attorney General's office to learn which of these agencies have any complaints filed against them. You can begin your search through the National Foundation for Credit Counseling, but be sure to take the time to look at many different agencies in depth before you choose one to work with.

Learn more about credit counseling. For more consumer tips, click here.

If you are a member of the military or are retired from active military duty, Military OneSource is where you can go to get help. Find the installation that is near to you and use their family service center or support center to get the financial help you need. You can find them by calling 1-800-464-8107. Another option is to check with a military relief society to get financial counseling. Those who are in the Navy or the Marines can contact the Navy Marine Corp Relief Society. Those who are in the Coast Guard can get help from Coast Guard Mutual Assistance.

Payday Loan Tip #4: Cope & Don't Borrow More

Cope With a Cash-flow Gap Without Borrowing

If you are about to be late with a rent, utility, or mortgage payment, take some time to talk to the creditor. If the bill does not carry interest, ask if you can make a payment arrangement. You might be able to delay the payment until your next paycheck arrives. You also may be able to set up a repayment schedule that allows you to stretch out your payments over time. Before agreeing to this, though, ask if there are any fees or extra costs for the service. Remember that getting behind on your payments on your bills could cause your credit rating to drop.

Some employers will allow you to have an advance on your paycheck. This is not a loan, but it is actually money that is taken out of the amount of your next paycheck. If your employer allows this, keep in mind that there may be a limit on how often you can request an advance.

Do not purchase expensive items until you have the cash available to do so. Even if it is a car repair that you need to have done, you can often put that off a few months by taking public transportation. You can also look into a carpool arrangement with other co-workers who live near you. This gives you the chance to collect the cash you need for the car repair.

You can always use your emergency savings instead of borrowing, but you must remember to repay yourself like you would a creditor.

There are also local charity and community programs designed to help families who cannot make ends meet. Take advantage of these. Also, you can sometimes apply for assistance programs for certain bills, such as your utility bills.

If you can, take on extra hours or work to earn more income. Overtime pay is a great way to add to your income. If you own something valuable that you no longer need, sell it to allow you to pay your bills.

Another option is to adjust your withholdings on your check so you have more money in your paycheck each week instead of getting a big tax refund at the end of the year. However, do not withhold too little, because that will cause you to owe taxes in the spring. If you can get an Earned Income Tax Credit, find out if you can get that credit paid in each check instead of at the end of the year at tax time.

Payday Loan Tip #5: Find Alternatives

Find Less Expensive Money

Talk to friends or family members to ask them if you can borrow money. Be sure to have a written agreement about the repayment terms to avoid any family problems later on.

If you have a bank, apply for a line of credit or a small loan with that financial institution. If you have a credit union membership, you should know that credit unions often offer small loans to their members, even though they do not advertise this fact. Keep a credit card on hand with a low limit to use for emergencies. However, only use that credit card for true emergencies, and pay it off as soon as you possibly can.

Also, take the time to comparison shop so you can find the least expensive credit possible. Before you sign any contract committing you to a debt, make sure it is the best option. Don't forget to compare both the APR (annual percentage rate) and the finance charge in dollars and cents. It is a federal law that all lenders or other sources of credit, except those providing bank overdraft loans, must disclose their credit costs in the same manner so you can compare costs.

Consider finding less expensive sources for the loans you need.

Licensed small loan companies or signature loan companies can charge 24 to 48% annual interest, and they may allow you to make payments in monthly installments. This can be a more affordable alternative. For instance, if the interest rate is 36% and you borrow $500 and make monthly payments for four months until it is paid off, the total interest you will have paid is $38.04. However, if you borrow the same $500 from a payday loan company, and renew it every two weeks for those four months, you will have paid around $700 in interest and fees, assuming the fee is $17.50 per $100 that you borrow.

Another option, although not a cheap one, is to take a credit card cash advance. If you pay a $500 cash advance in four months, it will cost you $48.86 if the APR is an average of 20.23%, there is no grace period, and you paid a 3% cash advance fee with $7 minimum. Even the most expensive cash advance options on a credit card cost $66.77 for $500 that is paid back in four months. (Cost Chart)

Keep in mind that any cash advance or credit card that you receive from a federal credit union cannot have any more than 18% annual interest. Therefore, borrowing $200 with a credit union loan and repaying it in three months only costs $6.05.

If you are a member of the military, you should contact the relief society or military charity for your particular branch. With these organizations, you may be entitled to free financial help in emergencies.

Another option is to use your bank or credit card to apply for real overdraft protection. These programs will automatically charge your credit card, use a line of credit, or transfer money from your savings account to deal with any checks or debits for which you do not have sufficient funds in your account. Real overdraft protection is not free, but having this is much more affordable than borrowing from payday lenders or paying the fees for bouncing a check. However, make sure that you are not using a "courtesy overdraft" program that will charge you a fee if you bounce a check or create an overdraft and allows you to use the ATM or your debit card to create overdrafts.

The other sources of loans, such as refund anticipation loans, car title loans, rent-to-own schemes, or car title pawns, should be avoided because they are high in cost and risk.

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