Credit People Debt Counseling Counselors Lot Make Plan

Many Americans spend a lot and save very little. "Consequently" (as a result), many Americans have a lot of debt. For some people, this debt is "manageable," meaning that they can make payments. But other people are "in over their heads" (are in a difficult situation with many problems that they cannot solve). These people often "turn to" (look for a solution in) credit counseling.

Credit counseling is education that helps people avoid getting into too much debt. For people who are already "deep in debt" (with a lot of debt), credit counseling can help them reach agreements with their creditors and make a plan to pay off debts over time. Credit counseling is often offered by non-profit organizations.

Credit counseling can be extremely helpful. Credit counselors might teach people about interest rates and "compounding interest" (how interest grows over time). They might help people make a "budget" (a plan for spending money) and "prioritize" (decide what is most important) their purchases. Often credit counselors "advise" (tell people what to do) people to cut up their credit cards so that they won't be "tempted" (won't have the desire to do something they shouldn't do) to spend money that they don't really have.

Good credit counselors can help people "manage" (control) their debt and create a plan to be debt-free within a few years. But there are other credit counselors who give people "partial" (incomplete) or incorrect information and don't really help them "get out of debt" (pay all their debts). Instead, they offer to "consolidate their debts" (put all their debts on one single credit card or account). Making a single payment is easier, but the account often has a much higher interest rate, so the person ends up paying much more money over time.