Legitimate credit counselors have long been frustrated with most credit card issuers’ unwillingness to sufficiently cut interest rates or provide other relief to troubled borrowers.
People would try to sign up for the counselors’ debt management programs, only to discover they couldn’t make the payments credit card companies required and their only real option was bankruptcy.
The problem has become more critical as more people sink deeper into debt and often have less income to pay what they owe.
Last fall, the leading credit counseling organization–the National Foundation for Credit Counseling–formerly called on creditors to take additional steps to make debt management plans more affordable.
Today, the NFCC announced the creditors had come through. All top 10 of the nation’s credit card issuers agreed to provide additional relief to troubled borrowers by waiving fees, lowering interest rates and accepting smaller minimum payments.
What that means for the typical credit counseling customer who owes $24,000 on credit cards is a payment as low as $420 a month, versus the $540 that would have been required earlier.
If you’re having trouble making your minimum payments and trying to avoid bankruptcy, a call to an NFCC-affiliated agency may be in order. But also discuss your situation with a bankruptcy attorney to see if starting fresh may be a better option.
For more, read:
- The consumer’s guide to credit counseling
- Get a credit card reprieve
- 15 steps if bankruptcy is inevitable
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