Are you having a hard time managing your debt? Perhaps you’ve considered some options to help you and stumbled upon consumer credit counseling. You may be wondering whether it’s effective and legitimate. You may also ask yourself how do such services get funded? Well, we are here to answer your questions!
Who Funds Consumer Credit Counseling Services?
When it comes to funding, there is a difference between non-profit credit counseling and for-profit services. Nonprofit credit counseling organizations receive funding from voluntary contributions from creditors. This allows agencies, such as American Consumer Credit Counseling, to provide services to anyone, regardless of income level, at a lower cost. While nonprofit credit counseling agencies do charge fees, these are minimal and fees are often waived for those in severe financial hardship. No one is turned away because they are unable to pay or even when they are simply shopping around for effective debt management solutions.
However, a for-profit credit counseling service’s fees are much higher, because the goal is to make money. Additional funding sources are not available, either, to offset any costs to the customers.
If you do decide to work with a non-profit, reputable credit counseling agency, it is not free. However, the rates are fair, regulated, and serve a purpose. Here is what you should expect from a credit counseling agency.
Key Features of a Credit Counseling Agency
- A legitimate debt relief agency is open and honest. It should be willing to provide you a clear, detailed description of its product and services. If the agency does not answer your questions or its answers are not satisfactory, go elsewhere.
- A reputable consolidated credit counseling agency will give you truthful, useful advice on how to manage your money and use credit wisely. Additionally, the agency will also help you establish a written budget and offer educational materials and financial workshops.
- The agency should have been in business for at least seven years and be a non-profit. The advantage of non-profit debt consolidation companies is that they can offer their services for free or low-cost. Creditors provide much of the funding for credit counseling agencies.
How Much Does It Cost?
The fees charged by a debt consolidation company should be reasonable, meaning a maximum of $70/month for a debt management program (fees vary by state). Free ongoing education on how to manage your finances should be available and accessible – even if you decide against entering a debt management program.
Here are the costs specifically for American Consumer Credit Counseling, a non-profit credit counseling organization (ACCC). Be sure to call for the absolute, most current rates.
- $39 enrollment fee
- Monthly fee of $7 per account with a maximum of $70
- Average monthly maintenance is around $19 per month
No matter which avenue you decide to take, do your research. Getting out of debt shouldn’t put you into more debt.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.