How Paying Down Debt Helps You Save

This week is America Saves Week, a national campaign to raise awareness about the importance of savings, and a time to celebrate accomplishments related to saving money and working toward financial goals. Saving money—as simple as it may sound—can be a somewhat complex topic. It’s not particularly hard to understand, but there are many different ways to think about saving, and to build a plan for saving more money. Today, let’s take a look at the relationship between debt and savings. Specifically, how does paying off debt help you save?

The Basic Formula

To be successful financially, and to save effectively, you have to remember a basic mathematical goal: that your income should be greater than your expenses. To reflect that mathematically looks like this: Income > Expenses. That’s pretty simple, right? If that is not true and your expenses are actually greater than your income, then it will be impossible to save money.

That’s because your savings is generally what’s left over from your income after expenses. So that formula looks like this: Income – Expenses = Savings. Now, there are two things to note about this. First, how much “savings” is left over after you subtract expenses may be in your control. Think of it this way, all income will eventually become spending (expenses) or savings. In other words, don’t assume that “expenses” are only the mandatory items like groceries, utilities, and housing. They also include discretionary spending, which are expenses you don’t make because you need to but because you want to. By limiting those purchases of “wants,” you can increase savings.

The second thing is that “expenses” means your non-saving expenses, and income is your gross income. That probably sounds obvious, but it isn’t always. Many people save automatically from each paycheck, which is a great strategy of “paying yourself first.” However, you don’t want to forget about that savings coming out before you get the check. Those automatic savings funds are being deducted from your gross income, like an expense, but are actually part of your savings.

What About Debt?

A recent study indicated that the average American household has over $145,000 in debt. Now if that figure seems incredibly high, it’s because the figure includes many types of debt, including mortgages. But with the average household with student loans averaging over $55,000 in that debt, and the average household with credit card debt averaging over $7,000, we know that there are significant challenges facing millions of American households.

Debt throws a wrench into the formula we mentioned above, because debt increases your expenses, often significantly. As a result, debt makes it so that there is less money left after your expenses, if anything at all. Basically, debt and savings are at direct odds with each other.

Paying Off Debt to Save More

You’ve heard the old saying that “a penny saved is a penny earned,” and it’s also true that “a penny of debt paid off is a penny saved and therefore a penny earned.” That’s more of a mouthful, but hopefully you get the point. For every bit of debt you can erase, you will free up more room to save.

That is a very direct relationship between debt and savings, but it isn’t the only one. Paying off debt also has other benefits that can help you “save” more over time. Here are a few examples:

Paying down debt helps you contribute to an emergency fund, so that you may not have to take on more debt and wipe out your savings when faced with an unexpected set of circumstances.
Paying down debt helps you achieve other financial goals, like buying a house, that can help you build equity, which operates much like savings.
Paying down debt effectively makes your savings and investments lower-risk. When you don’t have debt to worry about, you can more easily take a set-it-and-forget it approach to investing and retirement planning, without feeling like you need to pull out funds early to pay a debt.

These are just a few examples. But the basic idea is that when you don’t have to worry about debt, you’ll have more money for savings each month, but also more flexibility for how you use that money and how it can work for you over time.

Hopefully you are making progress on these two important financial goals of paying down debt and building your savings. Now is a great time to take inventory of where you stand, and to make a plan for the year ahead. Remember that if you would like additional assistance, our counselors can help in a free counseling session, and we invite you to get started today.

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Does Debt Consolidation Hurt Your Credit Score?

Debt consolidation can be a smart way to pay off debt in some cases. We have written before about specific debt consolidation strategies that you can use, including balance transfers, consolidation loans, and debt management plans (though DMPs are slightly different than true “consolidation”). But despite some of the perks, consolidation has drawbacks.

One potential drawback is the impact to your credit score. You might be wondering if consolidation hurts your credit. It turns out that the answer is a mixed bag. Some aspects of debt consolidation can hurt your credit score slightly in the short-term. Other aspects could cause positive changes to your credit score over the medium- and long-term. It really boils down to the specifics of your situation and how you manage your debt after consolidation. Let’s take a closer look.

Reminder: Components of a Credit Score

Before we talk about the impact of debt consolidation, it’s important to recap the components of a credit score. A FICO score is made up of your payment history (35%), amounts owed (30%), length of credit history (15%), credit mix (10%), and new credit (10%).

Debt consolidation can potentially impact all of these categories.

Minor Impacts

First, debt consolidation involves opening a new loan or line of credit (i.e. a balance transfer card). This will involve at least one new credit inquiry and lower the average age of your accounts, which can create a short-term drop in your score. One tip is to do your research first. As Experian points out, by knowing your credit score in advance and researching the loans or credit cards available, you can limit the number of inquiries, protecting your score.

If you use a balance transfer card to consolidate pre-existing credit card debt, you won’t affect your “mix” of debt. However, if you use a consolidation loan and you have not had a loan before, this could have a favorable impact on your credit mix, since you would then have credit cards and a loan on your file.

Major Impacts

The greater impacts to your score will come from payment history and amounts owed, since they are the two most heavily weighted categories of your credit score. The term “amounts owed” can be a little misleading, because it is not just about the total debt balance that you owe. What matters more is your credit utilization. This is a ratio of how much credit you are using (total balance) to how much you have available (total credit limit). A high utilization can hurt your score.

All things equal, debt consolidation can improve your credit utilization and therefore improve your credit score. To give a quick example, imagine you had three credit card accounts. Each had a $10,000 credit limit, and on each you had a $5,000 balance. This means you had a total debt balance of $15,000 out of your total $30,000 credit limit. Your utilization was 50 percent. But let’s say you then opened a balance transfer card. We will assume you could move all of your existing debt ($15,000) to the new card, and that the new card had a credit limit of $15,000. Assuming you left your previous cards open, you would now have a total balance of $15,000, but a total credit limit of $45,000. Therefore, your utilization would have dropped to 33 percent, which should have a positive impact on your credit score.

To have an immediately positive effect on your utilization, you will need to leave your previous accounts open. You have to be careful here, and know your personality. If leaving those credit cards open will be tempting—and you might run up additional credit card bills—then it may be better to close them. However, closing them will increase your utilization and lower your average age of accounts, probably hurting your score in the short-term. So, it can be a difficult choice.

Whatever you decide, the last major category is your payment history. If you have been making regular payments, but chose consolidation simply to get a lower interest rate, then you may not have much difficulty with making on-time payments, and that should help your score. In fact, you may find payments to be more manageable after consolidation. On the other hand, if you are already struggling and you leave old accounts open (again, creating the opportunity that you might spend more than you can repay), this could lead to missed payments and, in turn, hurt your credit score.

Are You Asking the Right Question?

If you are considering debt consolidation or other repayment strategies, it is only natural that you want to know the impact to your credit score. Credit scores are important, particularly when it comes to major financial goals like buying a home. However, you do not want to miss the forest for the trees. You might want to consider what your top priority is. In all likelihood, it’s that you pay off your debt efficiently and reliably.

Debt consolidation, through a balance transfer or consolidation loan, may be the right way to achieve that goal. It is likely a great option if you already have good to excellent credit, can pay off the debt quickly (before promotional interest rates expire), and can avoid some of the hefty fees consolidation loans and balance transfer cards often charge. However, the short-term boost to your credit will not be worth very much if you find yourself in significant debt again in the near future. What’s best for your credit score in the long-term is whatever approach allows you to reduce your debt to a manageable level and keep it there.

If you would like more help deciding which repayment option is best, consider checking out our debt relief comparison guide, or working with a credit counselor.

For more information about other debt repayment options check out our Ultimate Debt Relief Comparison White Paper.

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Smart Strategies for Bill Consolidation or Debt Consolidation

If you’re trying to manage bills that are piling up, you may have come across the idea to consolidate them. Consolidating your debts can be convenient, allowing you to make one monthly payment. It can also allow you to swap high-interest debt for low-interest debt. However, it has drawbacks and is not right for everyone. Here are some bill consolidation strategies to keep in mind as you make a plan for paying off your debt.

Refresher – What is Bill Consolidation?

Bill consolidation can be a slightly misleading term, because it sounds broader than it really is. Essentially, bill consolidation is the process of combining multiple bills or debts into a single financial commitment that you owe and make payments toward. The reason the term “bill consolidation” can be confusing is that many bills cannot be consolidated, and that many debts which can be consolidated are not normally thought of as “bills.” Another term, “debt consolidation” is commonly used to refer to the same concept as “bill consolidation” and may be more accurate in many cases.

To simplify our discussion in this post, we are going to focus only on consolidating unsecured debts. Credit cards and medical bills are two common unsecured debts that can be consolidated.

Another Refresher – Know Your Credit Score

Whether true debt consolidation is a viable and smart strategy will depend on the terms you receive. Those terms will depend on your credit score. Therefore, you need to take inventory of where you stand in order to assess which realistic options will be available to you. If you have a great credit score, then a balance transfer may be a good option. If your score is on the low end, then the terms on a balance transfer or loan will not be as appealing and could create more harm than good.

There are many ways to check your credit score. Ideally, you would check your FICO score, but even an alternative score could provide a sense of where you stand and how a lender would evaluate you.

Strategy #1 – Balance Transfer

A balance transfer involves opening a new credit card with a low or zero-percent interest rate (for a promotional period). You then move your previous debt(s) to this new credit card. In effect, you will have reduced your interest rate from a high rate on the old debt to a lower rate on the new card.

You will typically pay a fee for the amount you transfer (although some cards waive the fee for applicants with excellent credit), and there will be a limit to how much you can transfer (meaning you may not be able to transfer all of your existing debt).

This is a smart strategy IF:

You have good enough credit to receive a zero-percent promotional rate. Note: it is an even better strategy if you have excellent credit and can avoid a transfer fee.
You will pay off all the debt transferred before the promotional interest rate expires.

Strategy #2 – A Debt Consolidation Loan

A consolidation loan works much like a balance transfer, but you would be receiving a loan rather than a line of credit. The process would involve opening the loan, using funds from the loan to pay off the previous debt(s), and then repaying the loan. Like with balance transfers, better terms will be reserved for borrowers with good to excellent credit.

To make this strategy worth it, a borrower should only accept a loan with an interest rate significantly lower than the rate on the existing debt(s). Some lenders may charge origination fees, but borrowers should shop around and try to avoid such fees.

This is a smart strategy IF:

The loan provides better terms than any balance transfer available to the applicant OR the applicant is concerned about being able to pay a balance transfer debt during the promotional interest period.
The interest rate on the loan is significantly lower than on the previous debt(s), meaning the borrower has good to excellent credit.
The borrower can avoid origination fees.

Strategy #3 – Debt Management Program

The two strategies discussed so far are primarily reserved for people with good to excellent credit. But what about if you have high interest debt and a credit score that is not good or excellent? In that case, there are some options. A few involve significant risks, and we do not generally recommend them (things like HELOCs and borrowing from your retirement accounts). However, a debt management plan may be a good fit.

In a debt management plan, you work with a credit counseling agency to pay off your debts. The counselors have relationships with creditors, and in many cases your creditors will reduce interest rates and waive fees while you are on the plan. The plan is structured so that the payments are manageable, and the plan continues until you pay your debts is full.

You make one monthly payment under the plan, and the counselors distribute that payment to your creditors. So technically, a debt management plan is not a form of consolidation. That is because under the plan your accounts remain separate and are not consolidated into a new financial commitment. However, it provides the benefits of consolidation, because you only have to make one monthly payment and you often receive reduced interest rates.

Additionally, the counselors provide financial education and are there as a resource for you throughout your repayment process.

This is a smart strategy IF:

Your credit does not qualify you for good rates on a balance transfer or consolidation loan; AND/OR you would like to have a counselor resource and financial education during your repayment; AND/OR you have experienced a financial setback such that even if you received good terms on a consolidation product, it would be difficult to make payments.
You have primarily high-interest unsecured credit card debt.

As you can see, a lot goes into the decision to pursue debt consolidation. A balance transfer or consolidation loan may be the right solution for those with great credit scores who can secure good interest rates and avoid fees. For everyone else, the terms and fees may be so high that you don’t save any money compared to the high interest debt you already had. In those cases, a debt management plan may make much more sense. The plan is structured for your specific situation, often provides lower interest rates, and allows for one monthly payment. To learn more about where you stand and which path forward may make sense for you, speak with a credit counselor.

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How to Negotiate Debt Settlement on Your Own and the Impact to Your Credit Score

If you have significant unsecured debt, you may be considering various repayment strategies. Debt settlement is an option that often looks attractive at first glance but can actually be much more problematic than it first appears. This is especially true in the case of “professional” debt settlement—an arrangement that involves working with a debt settlement firm that negotiates with your creditors on your behalf. This can be a very expensive endeavor, take many years to complete, leave some of your accounts unresolved, and wreak havoc on your credit score. However, there is a different type of debt settlement, which some people refer to as “do-it-yourself” or “DIY” settlement. This has some advantages over professional settlement, but still has drawbacks. Let’s take a closer look.

When and Why Should You Consider DIY?

DIY debt settlement may be a better alternative to professional debt settlement. But, that is not saying much, since debt settlement is perhaps the least effective and least reliable method of debt repayment. You should probably only consider DIY settlement if you are already delinquent on your accounts. It would not be wise to intentionally become delinquent in order to pursue debt settlement, because a debt management plan would likely be a much better option. You might also consider DIY settlement when you have a small number of accounts to resolve. For example, if you are just trying to manage one difficult debt—say a hefty medical bill—then DIY settlement might make sense.

If you decide to pursue settlement, there are several reasons why you may opt for a DIY approach. We have previously documented the extensive issues with professional debt settlement. Consumers pursuing that option should expect to pay fees amounting to 15 to 25 percent of the enrolled debt. They should plan on the process taking three to four years. They should anticipate that some (if not most) of their accounts will not be settled, and they should know that forgiven debt will be taxed. On top of all this, we predict that most professional debt settlement clients will see their credit score drop by more than 100 points.

Taking a DIY approach may avoid some of these issues.

How to Do It

If you pursue DIY settlement, these are the steps to take.

Research First

The first step you should take is to research your creditor and any policies they may have regarding debt settlement. You can find online forums where other consumers discuss how they have handled settlement negotiations with specific creditors in the past. You may also find information from the creditor directly. Do this research to get a sense of what your creditor might agree to.

Save Up Cash

You may maximize your negotiating leverage by stocking up on cash. Most creditors will want to see an offer of a large lump sum. NerdWallet reports that you should generally expect to be able to settle with an offer of 40 to 50 percent of the balance, so that is probably a good goal to have in mind.

Some creditors may be open to a settlement payment plan instead of a lump sum. However, you should think very carefully before considering that approach. Depending on the terms of the payment plan, your agreement could terminate if you miss a single payment.

Prepare Your Offer

You know that realistically you can expect to settle at around 40 to 50 percent of the balance. So, your initial offer to the creditor should be quite a bit lower in order to leave room for negotiating. Come up with an initial lump sum offer and call your creditor. You may need to speak with a manager, or call back multiple times until you reach a helpful representative. Based on your research, you may find that your creditor has a specific “financial relief” division, so you will want to be sure to call that department to increase your chance of success. Remember, there is no guarantee that your creditor will agree to any settlement offer.

Get It in Writing

Once you have a verbal agreement with your creditor, you must ensure that the deal is put in writing. This writing will provide proof of the arrangement should any issues arise later. The last thing you want is to hand over a large lump sum only to have the creditor claim that they never agreed to treat that as a full settlement.

Make Your Payment(s)

Of course, the last step is to hold up your end of the bargain. Make your payment(s) promptly and in accordance with your agreement. Make sure that the creditor receives the payment(s) and holds up its end of the deal. From there, keep an eye on your credit report to ensure the account’s new status is reported correctly.

Credit Score Impact and Taxes

The steps detailed above can allow you to bypass many of the pitfalls associated with professional debt settlement, but not all of them. The main pros of the DIY approach are that the process can move more quickly, and that it can be much more affordable since you won’t pay any fees to a firm. However, there are still cons.

The major con is damage to your credit score. Every additional missed payment to your creditor hurts your credit score. So, if it takes you a few months to save up for a lump sum payment, your score may take a beating in the meantime. On top of this, settling a debt is always more damaging to your credit than paying a balance in full. As Experian explains, settling a debt (even with the DIY method) leads to the debt being reported as “settled” or “account paid in full for less than the full balance” on your credit report. These are considered negative marks and will remain on your report for seven years from the delinquency date.

Lastly, while you will not have to worry about paying fees to a settlement firm, you will still have to worry about the IRS. Forgiven debt is considered taxable income. Once you factor in this expense, your settlement will not be as good of a deal as it initially appeared. If you saved up a load of cash for a lump sum payment, you may need to turn around and start saving another lump sum—this time for a tax bill.

Worth It?

DIY debt settlement definitely has some advantages over working with a professional debt settlement firm. That does not mean that it is a good idea, though. Many consumers would be much better offer with credit counseling or another method of repayment. DIY settlement is best for those with a very small number of accounts. Still, those that pursue this option should prepare for significant credit score damage, tax liability, and the potential that their settlement efforts will not be successful.

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How Credit Counseling Can Help When You are in a Financial Crisis

A personal financial crisis can take different forms. Losing a job, having your work hours or income reduced, facing a huge medical expense, and having your identity stolen are just a few examples. Many times, these situations can lead to larger problems, especially mounting credit card debt. If you find yourself in a financial crisis, you should know that credit counseling is an available resource, and it could be the perfect solution to help you recover. Let’s take a closer look at exactly how credit counseling can help.

Talking to Someone

We know that financial stress can impact your mental health, and many people find comfort and relief by talking about their concerns with someone else. Credit counseling pairs you with someone who is willing to listen and ready to help you move toward your goals. No, a credit counselor isn’t a therapist, but credit counselors are known for providing comfort in difficult times. Your credit counselor will approach your situation with understanding and empathy, and give you space to voice your financial regrets, concerns, and goals.

Trusting an Expert

A credit counselor isn’t just confidant; he or she is an expert trained in helping consumers overcome financial difficulty and make a plan for their future. There is great peace of mind that comes with working alongside such an expert. When you are in “crisis mode,” you may not have the time or mental energy to get bogged down in the details or pull yourself by the bootstraps to achieve financial recovery. The great thing about credit counseling is that you don’t have to. You get to put your financial situation in the hands of an expert and educator who can guide you toward your desired outcome, help you create a structured plan, and teach you new financial strategies and behaviors along the way.

Reviewing Your Credit Report

Your credit report is an extremely important financial indicator, because the information it contains affects your credit score. Unfortunately, mistakes are far too common in credit reports and many go unnoticed. If you are going through a financial crisis, you will want to keep a close eye on your credit report to make sure it does not have errors holding back your score. You will also want to watch the data on the report over time as a sign of your progress paying down debt.

Walking through each line item of your credit report with a credit counselor can reveal errors, highlight areas to work on, and give you the opportunity to ask questions and learn more about how credit reports and scores work.

Exploring Numerous Solutions

Sometimes you have a general problem and aren’t sure what the best solution is. Money inherently works this way. For example, if you are having a hard time paying rent, credit card debt might actually be the bigger underlying problem. If you could free up some cash away from your credit card bills, rent would be easier to make. That’s just one example. The good news is that credit counseling helps identify the major issues and identify your best solutions.

For some, housing really is the main issue. In that case, a credit counselor can point you to a housing counselor to explore options for how to keep your home. Alternatively, maybe your credit card debt makes you a good candidate to consider a Debt Management Plan. Or, maybe your financial strain is best addressed by some minor tweaks to your monthly budget. Your counselor can explore all of these solutions with you and even connect you to local resources in your community in cases where doing so would be helpful.

Simplify Your Month-to-Month Routine

If you opt for a Debt Management Plan, you will receive numerous benefits. One benefit that is particularly helpful is that your month-to-month routine will become much simpler. By making one monthly payment to cover all of your credit card debt, you don’t have to worry about the hassle of keeping track of multiple bills. Simply make one payment to the credit counseling agency, and you’re covered for the month. Not only that, but the DMP will put an end to those pesky creditor and collection calls, which are the last thing you need when you are in an already stressful situation.

Getting Started is Easy

If you are in a crisis, you may not have much time and energy left in the tank. Thankfully, it is very easy to get started with credit counseling. Sessions can be held online or via telephone (or in-person if you prefer). All you need to do to prepare is gather your basic financial information, including a list of your expenses, recent paystubs, and your credit card statements. You can read more about what to expect, or get started here.

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#AskanExpert: Should I File for Bankruptcy?

Q. Should I file for bankruptcy? I lost my job in 2007. I became unable to pay my credit card debts about two years later. My debts were charged off except for one that is suing me. I started working again in November 2016. An old debtor filed a judgment in 2016 and has now levied my bank account. I was unaware I was being sued until 2019 when my bank account was levied. I have very little left over each month after paying rent and bills. My debt is about $20,000 not including the one suing me, which is a little over $10,000.  My main concern is this judgment. I don’t know what to do. Please help!

Dear Reader,

I’m sorry to hear you are going through such a difficult situation. Taking care of your expenses and your parents’ can be overwhelming, especially if you can’t keep up. Filing for bankruptcy could be an option that can help you get rid of your credit card debt, including your judgment. Yet, it may not be your only one. In addition to your debts, you should also think about your long-term plans to make sure you can still pay for all your financial obligations and stay out of debt.

Unfortunately, many people learn that a creditor has sued them when their wages are garnished or, like you in your case, their bank account is levied. At this point, you have limited options to deal with the judgment entered against you. One of your options is to contest the judgment and ask a judge to set it aside. This is usually very difficult to do because you would have to prove in court that the creditor violated federal or state laws while collecting the debt or during the lawsuit process. And if you are just hearing about it, chances are that you don’t have documentation in order to move forward.

Another option is to negotiate a deal with the creditor to settle the debt for less than what you owe. Since the creditor is already collecting money from you, you don’t have a lot of leverage. You could offer them a lump sum and ask for reduced monthly payments. If you were to get a deal with them, make sure you get it in writing. Your third option circles back to bankruptcy.

Bankruptcy is the right choice in some circumstances. It’s a big step and it can be costly, but for some people, it is a chance to start again. I’ll suggest that before you make a decision on your own, be sure to talk to a nonprofit credit counselor. Your counselor will review your financial situation in depth, including your income, expenses, and debts, and give you the information you need to help you make the right decision. They can help you explore what additional options beside bankruptcy you may have. Most importantly, they can help you create a budget to help you plan for the future to pay your debts and stay out of debt. You can talk to nonprofit credit counselor online or over the phone today. Stay strong. Good luck.


Bruce McClary, Vice President of Communications

Bruce McClary is the Vice President of Communications for the National Foundation for Credit Counseling® (NFCC®). Based in Washington, D.C., he provides marketing and media relations support for the NFCC and its member agencies serving all 50 states and Puerto Rico. Bruce is considered a subject matter expert and interfaces with the national media, serving as a primary representative for the organization. He has been a featured financial expert for the nation’s top news outlets, including USA Today, MSNBC, NBC News, The New York Times, the Wall Street Journal, CNN, MarketWatch, Fox Business, and hundreds of local media outlets from coast to coast.

If you have a question about your own specific financial situation, don’t hesitate to submit your question to our experts today! If you would like a thorough review of your personal financial situation, contact one of our nonprofit credit counseling agencies today!
*Some questions have been shortened and/or altered for publication purposes while others have been published as is.

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The Debt Relief Industry is the Wild West, NFCC featured on “What’s Working in Washington” Podcast

Our own Bruce McClary, VP of Marketing and Rebecca Steele, CEO joined Richard Levick on the ‘What’s Working in Washington’ podcast to talk about about consumer debt and the increasing problems consumers are facing when trying to find help. Consumer unsecured debt continues to rise and is currently sitting at $1.5 Trillion. 

Rebecca Steeles says, “The first step is always the hardest to take, but it’s important to move past the shame and take it!” In earlier days, there was a sense of shame in taking on debt and people avoided it, now it’s so common, everyone has it and feels it’s ok and it’s more important to buy things to show people you love them, like for example the holidays. Statistics show that the average consumer racked up $1300 on their credit cards just for the holiday season. While one in ten are still carrying debt from the 2018 holiday season! If you make minimum payments on this with an average of 18% interest, it will take six years to pay it off. 

On top of taking on debt, American consumers also report not having at least $400 to cover an emergency, which in turn leads them to going further into debt if an emergency arises. People on average have five major credit cards. It’s hard to get out of debt once you are in it. When people are desperate they need to know where to turn because it’s not just one creditor, it’s on average at least five and when they aren’t able to take care of it themselves, predators come out from all directions. 

Here more about the dangers of the “wild wild west” of the debt relief industry at the links below, what we mean by predatory, and what consumers should do instead at the links below: 

Part 1: The Problem with Consumer Debt and the Debt Relief Landscape

Part 2: Where to Turn for Free Help for Your Debt

Nonprofit credit counseling can help you figure out the right option for you and how to navigate the landscape of debt relief options. It gives you a safe space to deal with your debt, with a nonjudgmental ear. They are going to help you with a budget, do a thorough review of your complete financial picture and provide a plan customized to you. Credit counseling is typically free. They are there to advocate for you and ensure that you are better prepared to get out and stay out of debt.

“We are not working for the banks, we are working for the consumer,” said Rebecca Steele, “a lot of banks are working with us and we can work with them on your behalf.”

For the full transcript click here.  

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