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Non-Profit vs. For-Profit Credit and Debt Counseling Services

Facing a looming financial crisis due to heavy credit card or other debts can be a stressful situation for many people. Fortunately, there are many credit and debt counseling programs available to help folks navigate a path through this frightening storm. While most of these credit and debt counseling services are offered by businesses looking to earn profits, many are available through non-profit organizations. Both for-profit and non-profit credit and debt counseling options offer advantages and disadvantages. The services each kind of credit and debt counseling organization is able to provide vary considerably. It pays to examine each carefully to find the type that best matches your particular situation.

Non-profit credit and debt counseling agencies exist to provide expert advice and to help consumers find ways to better manage their incomes and expenses. They offer their services completely free of charge. With no underlying profit motive, these non-profit services are understandably limited in terms of what they can do for you beyond talking to and advising you. For folks who really just need someone trained in financial areas to assist them in setting up workable budgets and to design debt repayment plans under their existing conditions, a non-profit credit and debt counseling agency is probably the best choice. If, however, you find yourself so deeply in debt that you are certain your only recourse is finding a way to reduce your debts and lower your monthly payments immediately, a for-profit credit and debt counseling company might be the way to go.

For-profit credit and debt counseling businesses may have a better chance reducing the amount of your principle balance you owe to each creditor. While these credit and debt counseling companies will charge you fees and interest charges for their services, it is often a small price to pay for the amount of savings you will realize over the years. Consider that the company will work hard to negotiate with your individual creditors to get them to reduce the amount you owe. Add to that the fact that you will most likely be paying a much lower rate of interest to the credit counseling company than you are currently paying on your credit card debts. Finally, imagine only writing one check each month (to the credit counseling company) instead of all those checks to each creditor. The overall picture is one where both you and the credit and debt counseling company will come out winners. Just be sure to compare the reputations, services and prices at each company you’re considering before making a final decision.