Q & A - Questions and Answers

What Are the Pros and Cons of Using a CCCS?

Pros of Using a CCCS

• Monthly bills are conveniently paid for you
• You only make one low monthly payment
• Credit Counselors will negotiate with creditors to reduce interest rates and monthly payments
• Credit Counselors will generally get creditors to waive late and over-the-limit fees
• As mediators between you and your creditors, harassing collection calls and notices will stop
• Provides immediate relief
• Better than bankruptcy

Cons of Using a CCCS

• You are still obligated to pay back the full balance on all of your debt
• It will take substantially longer to pay off your balances, generally 4-7 years
• Although lower, you are still being charged interest on all of your accounts
• You are restricted from using credit while enrolled in a CCCS plan
• An 8% to 25% commission fee will be charged on the money they "save you" in the end (you could have applied their commission to your actual debts instead)
• They typically charge exorbitant set-up fees (or "donation" fees if the CCCS claims to be a non-profit)
• The debt relief is only temporary and will end up costing you more in the long run
• YOU WILL DAMAGE YOUR CREDIT

Remember, the only time you should consider using a CCCS is when your financial situation continues to spiral downward, despite other attempts at resolution. You should be nearly bankrupt before considering hiring a third party to handle your debts for you.

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