6 mistakes that can make debt relief more expensive
Summary
Many Americans are struggling with high credit card debt and are turning to debt relief programs. However, making mistakes during this process can increase costs and reduce savings, so it's important to understand key points before enrolling.Key Facts
- Credit card interest rates are still high, averaging over 21%, making debt harder to pay off.
- Inflation and record household debt levels are adding to financial challenges for borrowers.
- Waiting too long to start a debt relief program can increase the total interest you owe.
- Debt settlement fees vary widely, generally between 15% and 25%, so comparing companies can save money.
- Debt settlement can harm your credit score; other options like debt management plans may have lower fees and less credit impact.
- Continuing to use credit cards while in a debt relief program can add more debt and make relief less effective.
- Legitimate debt relief companies are not allowed to charge fees before settling any debt.
- Carefully choosing and understanding your debt relief plan can improve your chances of success and reduce costs.
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