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When you’re struggling with debt, it’s hard to know where to turn.
High fees, finance charges and missed payments add up quickly.
Before you know it, you’re drowning.
If you’re afraid you can’t make your debt payments each month — or you feel like you’ll never get out of credit card debt — working with a nonprofit credit counseling agency can help.
What Is Credit Counseling?
Most reputable credit counseling services are provided by nonprofit agencies.
They offer a variety of services, including general financial advice, homeownership counseling and debt management plans.
You can find credit counseling agencies at local offices, online and/or over the phone.
Trained credit counselors can review your financial situation — including your credit card debt — and make recommendations to improve it.
As an impartial third party, credit counselors can also help you organize your credit accounts, obtain a credit report and develop a budget.
Services Provided by Credit Counseling Agencies
Here are the main services credit counseling agencies offer, so you can decide whether it’s beneficial to work with one.
Debt Management Plans
Credit counseling agencies are perhaps best known for helping you create a debt management plan.
A debt management plan rolls all your debts into one monthly payment to make it easier to manage.
You’ll make a single payment to the credit counseling organization each month or pay period and the organization will work with your creditors to make sure everyone gets paid on time.
Debt management plans usually don’t reduce your credit card debt, but they can help lower your overall monthly payment by negotiating extensions of the periods over which you repay a loan.
Debt counselors can also ask creditors to reduce your interest rates by as much as half, or to waive certain fees.
You won’t be able to keep racking up debt, either — your lines of credit will be closed or suspended while you’re in a debt…
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