We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. A debt management program could be the key to becoming debt-free, but there are some things you should know before enrolling.
Getty Images Credit card debt is a growing issue nationwide and it is weighing heavily on many households as we move through the second quarter of 2025. For example, recent data shows the average cardholder is carrying nearly $8,000 in credit card debt, while credit card interest rates remain stubbornly high at nearly 22% on average. This combination creates a challenging environment for cardholders who are carrying a balance while trying to stay afloat financially.
Credit card payment delinquencies have also been steadily increasing, with more cardholders either missing payments entirely or making only minimum payments on their balances. These trends aren't just indicative of the stress that cardholders are facing; they're also warning signs that long-term financial strain may be on the horizon for many Americans, especially as living costs continue to rise. For those feeling overwhelmed by mounting debt, debt management programs may be a solution to consider.
These structured programs, which are offered by credit counseling agencies, can offer a path forward for those struggling to make progress on their own. Before enrolling in a program this May, though, you'll want to understand a few important facts about how they work. Speak to a debt relief expert about your options today.
3 things to know before enrolling in a debt management program this May Here's what you should know before enrolling in a debt management plan: It could result in lower rates and fees When you enroll in a debt management program, the credit counseling agency will work directly with your creditors to try and negotiate better terms on your behalf. This often includes reduced credit card interest rates and waived late fees. These concessions can significantly lower your monthly payments and help you pay off debt faster.
For example, while the average credit card interest rate hovers around 22%, many debt management programs can secure rates that are several points lower due to the relationships the credit counselors have built with creditors. This reduction alone can save thousands of dollars in interest over the life of your repayment plan and potentially shorten your payoff timeline by months or even years. Get rid of your high-rate credit card debt now.
You'll get professional guidance on managing your finances Debt management programs typically include comprehensive financial counseling as part of their services. When you enroll, you'll work with trained financial counselors who can help you: Create a realistic budget that accommodates your debt payments Develop better money management habits Identify spending patterns that may have contributed to your debt issues Learn strategies to avoid falling back into debt after completing the program This educational component is often just as valuable as the debt repayment structure itself, as it addresses the root causes of financial difficulty rather than just treating the symptoms. If you have high amounts of debt, you may need more help While debt management programs can be effective for many people, they aren't always sufficient when it comes to helping those with overwhelming debt burdens.
If your debt-to-income ratio is extremely high or you're facing serious financial hardship, you might need to consider other options, like: Debt forgiveness: With debt forgiveness, the goal is to negotiate with creditors to settle your debts for less than what you owe. If successful, debt forgiveness can significantly reduce your balances. Working with a debt relief company can result in paying 30% to 50% less than the original debt amount, on average, but it may also negatively impact your credit and come with tax implications.
Debt consolidation: If your credit is still in decent shape, you might qualify for a debt consolidation loan to pay off your cards and replace them with a single, lower-rate option, which streamlines the payment process and reduces the total amount of interest you owe. However, this option can be risky if it leads to new card usage without fixing your underlying budget issues. Bankruptcy: If your debt is truly unmanageable and you're behind on payments with no end in sight, filing for Chapter 7 or Chapter 13 bankruptcy may offer a legal way to get a fresh start.
This should be a last resort given the serious financial implications, but for some, it's also the only realistic way forward. The bottom line Debt management programs offer a structured path to becoming debt-free, with benefits including reduced interest rates, waived fees and professional financial guidance. However, they're not a solution for every situation.
Ultimately, the right debt relief approach depends on your specific financial situation, the amount and types of debt you have and your long-term financial goals. Before enrolling in any debt relief program, take time to research multiple options, understand the potential impact on your credit score and consider consulting with a debt relief professional to explore all available strategies. The best solution will not only help you address your current debt but also set you up for long-term financial stability and success.
