Arizona Credit Counseling
We receive quite a few questions about credit counseling including:
- What is Arizona Credit Counseling and how does it work?
- Is credit counseling the best choice for debt relief or should I consider other alternatives?
Arizona Credit Counseling: Things to Know
Although many Arizona credit counseling organizations claim non-profit status, Credit counseling programs work in a very similar manner as a collection agency. Credit Counselors work on behalf of the creditors who pay them a fee (usually somewhere between 12-15% of the amount they collect for the creditors). In addition to being paid by the creditors, they also usually charge a monthly fee that usually ranges from $15-$40.
Arizona credit counseling organizations typically work with prearranged figures with creditors to reduce your interest rate and minimum payments. The average minimum reduction is 8%. It is not unheard of to have some creditors that will not go below a 20% interest rate and other creditors who may completely refuse to participate in these programs.
Most of the time when you enroll in a credit counseling organization, most (or all!) of your credit cards will be cancelled and you will need to pay 100% of the full debt amount, including interest!
What percent of people who start Consumer Credit Counseling programs do not complete them? We don’t know for sure, but we are aware of plenty of people who begin the programs and then drop out.