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Debt is a necessary financial burden for most consumers. It allows us to buy homes, cars, and finance college educations.

But credit card debt is different. If you charge more than you can afford to pay back each month, it can create a mountain of debt that continues to grow, leading to serious financial trouble.

A trained credit counselor can help you pay down debt, even if it seems insurmountable, and learn the skills needed to have a successful financial future.

Cara, who lives near Boston, was drowning in credit card debt five years ago. She’d maxed out 12 credit cards and owed nearly $60,000. Today, she is debt free and has good credit.

“I was living well beyond my means,” Cara told Checkbook. “I was paying my rent on credit cards, and I was trying to emulate a lifestyle that I definitely couldn’t support.”

Cara was able to make the minimum payments, but she knew she was accumulating an unreasonable amount of debt. If she continued to make just minimum payments, it would have taken her about 36 years to pay off the balances.

Cara called her credit card companies and asked them to lower her interest rates. Even though she had never missed a payment, they would not budge. Cara’s bank told her about Money Management International (MMI), a nonprofit credit counseling agency.

Cara set up an appointment to talk about her budget, and how to pay down her debt. She told me her counselor was “super nice and non-judgmental.”

MMI negotiated lower interest rates on 11 of Cara’s 12 credit cards, and set up a five-year repayment plan. Cara agreed not to use any of her credit cards until the debt was cleared.

“Every month they [MMI] would withdraw the money from my checking account, and then turn around and pay each of my 12 credit cards,” she said. “I got a ton of my life back in that I only had to make one payment every month.”

Today, Cara is debt free, and her credit score is up 100 points. She told me she is “really proud” that she was able to pay back what she owed. Her only regret is that she didn’t get help earlier.

“I was really embarrassed, and that’s what prevented me from calling and basically admitting that I had a spending problem and a bill problem,” Cara said. “My advice is to just call and reach out for help, and do it because no one’s going to yell at you, no one’s going to be judgmental. And if they are, they’re probably not the right partner to work with.”

What Non-Profit Credit Counselors Do

To deal with record inflation, Americans are piling up credit card debt at the fastest rate in more than 20 years, according to the Federal Reserve. With average credit card interest rates at nearly 19 percent—and continuing to rise—unpaid balances are growing ever-more costly.

A trained credit counselor at a nonprofit counseling agency can help you pay down debt even if it seems insurmountable and teach you the skills needed to have a successful financial future. Regardless of the amount, whether it’s $10,000 or $60,000, if it’s not managed and the situation is not addressed, it’s only going to get worse.

“It’s always helpful to get some outside perspective,” said Bruce McClary, senior vice president at the National Foundation for Credit Counseling (NFCC), a nonprofit dedicated to helping people deal with debt and better manage their finances.

A nonprofit credit counselor will review your entire financial situation, and give you a range of options, from things you can do on your own to a debt management plan.

“A financial professional can point you in a direction you may not have considered. They’ll create an action plan based on your priorities,” McClary told Checkbook. “The goal of the credit counselor is not just to help you affordably repay your debt, it’s also to put you in a position where you don’t have to be as dependent on debt in the future.”

An NFCC-member counseling agency should be able to negotiate lower interest rates on your debt. They have agreements with the major creditors to make certain concessions—such as lower interest rates—for people who enroll in their debt management program.

The initial counseling session is typically free. There is a monthly fee for the debt management plan, based on the amount of debt involved and the client’s ability to pay. It averages about $30 to $40 a month, McClary said.

Beware of Bad Actors

Scammers target people struggling with credit card debt. Their bogus debt relief services promise quick and easy ways to lower your interest rates. The fraudsters often claim to have special connections with creditors that “guarantees” success.

“Anything a debt relief company says they can do for you, you can do for yourself—for free,” cautions the Federal Trade Commission. “You have just as much clout with your bank or credit union as these companies.”

Dealing with a debt settlement service could make things worse, and leave your deeper in debt than when you started. That’s because these companies typically advise their clients to stop making all payments. Doing this, they claim, will encourage your creditors to negotiate with them. Nonsense.

“If you stop paying your bills, you will usually incur late fees, penalty interest, and other charges, and creditors will likely step up their collection efforts against you,” warns the Consumer Financial Protection Bureau (CFPB). “Unless the debt settlement company settles all or most of your debts, the built-up penalties and fees on the unsettled debts may wipe out any savings the debt settlement company achieves on the debts it settled.”

Using a debt settlement service can also have a serious negative impact on your credit scores, which will impact your ability to get credit for years.

Warning Flag: If the company wants any money upfront (for any reason), you’re dealing with fraudsters. It is illegal for companies that sell debt relief services on the phone to charge a fee of any kind before they settle or lower your debt.

“Some take the money and run, others will string you along, collecting payments and making promises while you fall farther behind on the delinquent accounts, the AARP Fraud Watch Network warns in a blog post on debt relief scams.

People who’ve paid upfront, sometimes thousands of dollars, complain that they can’t get refunds when their debt problems aren’t resolved.

The CFPB advises against doing business with any debt settlement company that:

  • Charges any fees before it settles your debts.
  • Represents that it can settle all of your debt for a promised percentage reduction.
  • Touts a “new government program” to bail out personal credit card debt.
  • Guarantees it can make your debt go away.
  • Tells you to stop communicating with your creditors.
  • Tells you it can stop all debt collection calls and lawsuits.
  • Guarantees that your unsecured debts can be paid off for pennies on the dollar.

What About Bankruptcy?

Bankruptcy may seem like a quick fix, but financial advisers say it doesn’t solve the problems that caused the financial hardship in the first place.

“With restrictions on repeat filing, and some of the limitations on the types of debt that are included in bankruptcy, turning to bankruptcy can be just as risky as hiring a debt settlement company,” McClary said. “You may end up making your situation worse by falling back into the same problems that led to the decision to file bankruptcy in the first place.”

Not Just for Those in Financial Trouble

You don’t have to be struggling with debt to talk to a nonprofit credit counselor. They can help you take a realistic look at your financial situation and how those fit into your long-term goals. A HUD-approved counselor can help you make smarter decisions when buying a home. Other counselors specialize in student loan debt or helping small business owners develop a solid financial plan.

Find Out More

National Foundation for Credit Counseling: Online at, or call 800-388-2227.


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Contributing editor Herb Weisbaum (“The ConsumerMan”) is an Emmy award-winning broadcaster and one of America's top consumer experts. He is also the consumer reporter for NW Newsradio in Seattle. You can also find him on Facebook, Twitter, and at