Credit Counseling

What is Credit Counseling?

Is credit counseling the best choice for debt relief?

Although they claim non-profit status, Credit counseling programs similarly work like a collection agency. Credit Counselors work on behalf of the creditors who pay them 12-15% of the amount they collect for the creditors. They can also charge a monthly fee from $15-$40.

Credit counselors work with prearranged figures with creditors to reduce your interest rate and minimum payments. The average minimum reduction is 8%. Some creditors will not go below a 20% interest rate and other creditors refuse to participate in these programs. All of your credit cards will be cancelled and you will need to pay 100% of the full debt amount, including interest! The truth is that most people who start Consumer Credit Counseling programs do not complete them.