The average U.S. household with at least one credit card owes nearly $15,950 in credit-card debt, according to recent data compiled by CreditCards.com.1 Yet when it becomes difficult to manage finances, only a fraction of people seek aid from a credit counselor.
Unfortunately, many people are confusing credit-counseling agencies with debt-settlement companies. While credit counselors exist to help people to learn more about money management and making better financial decisions and to develop a debt management plan in which to pay back their creditors, debt-settlement companies are about charging fees in order to negotiate with creditors.
According to the National Foundation for Credit Counseling, a network of accredited and certified credit-counseling agencies, the debt-settlement industry is filled with fraudulent groups that have made it difficult for reputable credit counselors to earn the public's trust by making promises they can't keep.
If you're looking for financial counseling and not sure where to turn, the following nonprofit resources may be able to help you with:
- Budgeting tips
- Financial education
- Debt management
- Pre-purchase counseling
- Bankruptcy and foreclosure prevention
The Association of Independent Consumer Credit Counseling Agencies. This organization represents accredited, independent nonprofit agencies that provide consumers with a trusted resource in which to receive the credit counseling they need to overcome financial struggles. All AICCCA members are non-profit, personal financial management service providers that offer free, confidential counseling by trained, certified counselors.
The National Foundation for Credit Counseling . Here you'll find agencies that are accredited by the Council on Accreditation. The foundation's agency locator is a database of local, regional, and national credit counseling organizations that provide credit, debt, and budget counseling in person, online, or by phone.
For more information on building a budget, visit the Protective Learning Center.