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Do Consumer Credit Counseling Debt Management Programs Work?

Many of these companies are non-profit counseling entities in the eyes of the government which means they are required to assist people in need of debt help through free educational materials, financial advice, and budgeting help. Consumer credit counseling services also provide paid services called debt management programs. The primary objective of consumer credit counseling debt management programs is to help you get ahead of your debt problem by reducing your interest rates, eliminating fees, and consolidating your payments.

They will set you up with a monthly payment plan that often lasts around 5 years. You will pay them one fixed amount and then they will be responsible for paying each of your creditors seperately on your behalf. They will offer you ongoing support throughout the program on an as need basis.

If the consumer credit counseling company is non profit, the fee for their service is capped by the government. Typically there is a modest set up fee over $100 and then a monthly management fee that is probably less than your electricity bill.

For many people the savings on the interest rates & fees, the advice, and the coaching they provide make this a valuable service with debt amounts that are more than they are comfortable with. Without these consumer credit counseling debt management programs, many people would never be able to ge their debt under control due to the speed with which the payments grow due to the rising interest rates.