How Much Does Credit Counseling Cost? (Hint: It’s Free)

Today, we want to clear up some confusion surrounding credit counseling and its fee structure. In other words, we want to clear the air about how much it costs. We recently wrote an article about who needs credit counseling, where we helped explain why some people avoid credit counseling when really it’s designed to be an inclusive service. Hopefully we cleared up some confusion there, but there is still work to be done. Let’s dive into the fee issues in more detail.

Confusion between Credit Counseling and Debt Management

What we want to emphasize above all else is that credit counseling and debt management programs do not always go hand in hand. This is the most important part of understanding why credit counseling is free and why you should never pay for credit counseling.

“Credit Counseling” has, apparently, come to mean two different things. The first definition is that credit counseling is an umbrella term for multiple services offered by an agency. If we adopt this definition, then debt management programs, student loan counseling, and maybe even housing counseling programs too, would all fall under “credit counseling.” While we understand why this is happening, we aren’t quite sure it’s the best approach.

The reason is that there is actually a specific service called “budget and credit counseling,” and it’s the most basic yet important service we offer. It’s a preliminary session with a credit counselor that allows the client and counselor to do a full review of the client’s financial situation. This involves an analysis of how much money is going in and out each month (calculating a total deficit or surplus), discussing ideas to reduce costs or increase income, and reviewing payment history to creditors, along with interest rates and other terms.

Credit Counseling Definition

For many of our clients, this is an invaluable service. Particularly for those who have not looked at their finances in this way before, organizing the information and being able to discuss the details with a financial professional immediately brings forth a new perspective. Of course, for those who are financially-savvy already and have already been budgeting and taking a critical look at their finances, this step may have slightly less value. But there’s more.

Credit Counseling as a First Step

We have said that credit counseling and debt management are two different services. And they are, without a doubt. But it might be helpful to think of the budget and credit counseling session as a stepping stone to a debt management program. After a counselor reviews your big-picture financial situation, he or she will then help you make a gameplan to address your debts.

Depending on the type of debt you have and which creditors you have accounts with, the outcome of this session may vary. If crippling interest rates are part of your financial struggle, a DMP could be the next logical step. Your counselor can explain which of your creditors are willing to make concessions, including offering a lower interest rate during your repayment.

Debt Management Program Definition

This is a particularly unique benefit of credit counseling because it’s one that you might not be able to acquire on your own. Even if you are a chronic budgeter and are good with numbers, interest rates show no mercy. Of course, you can negotiate interest rates on your own in some cases, but the results will likely not be as positive as if you go through a credit counseling agency that has years of experience mediating on your behalf.

You Should Never Pay for Credit Counseling

And of course, there is no pressure to take what the counselor is offering. Just because your credit account qualifies for concessions or other arrangements deosn’t mean you have to take them. And you might not be a good candidate for the DMP, anyway. Many of our budget and credit counseling sessions end with a counselor making suggestions about ways to cut costs or “self-pay” debts, such as with the debt snowball. In other cases (unfortunately), clients don’t have enough of a cushion at the end of the month, even after making budget changes, for a DMP to be feasible. They may need to pursue other options, such as bankruptcy. What’s great, though, is how much information and insight you can get about the options that are available to you. All without paying a dime.

We hope we have helped explain the benefits of the credit counseling session. Be sure to check out our guide on how to choose a credit counseling agency, because all are not created equal. In fact, they don’t all offer “free” credit counseling. Even some organizations who are labeled “non profit” will charge for the services we have outlined here. The good news is that all agencies certified by the National Foundation for Credit Counseling (NFCC) do offer free credit counseling sessions, so be sure to make sure the agency you choose is NFCC-accredited. With this knowledge in hand, you should never have to pay for a budget and credit counseling session!

Thomas Bright is a longstanding Clearpoint blogger and student loan repayment aficionado who hopes that his writing can simplify complex subjects. When he’s not writing, you’ll find him hiking, running or reading philosophy. You can follow him on Twitter.

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7 responses to “How Much Does Credit Counseling Cost? (Hint: It’s Free)”

  • JoAnne Abed

    Hi there. Are there any special arrangements or programs in place for senior citizens? I am trying to help and elderly relative who has gotten in way over his head and is very confused about finances in general.

    Thank you!

    • Thomas Bright

      Great question–I’d encourage you and your relative to consider talking to a counselor. There’s not a different program per se, but counselors will make different sorts of recommendations, connect you with difference local resources, etc. based on age/situation. Hope that helps!

    • Thomas Nitzsche

      Hi JoAnne, I would recommend that your relative talk with a credit counselor (for free), perhaps a conference call or with you or another relative with him at the meeting. This would help him to develop a plan to get things back under control financially. If he is on Social Security and meets certain guidelines, he might also qualify for a Representative Payee Service to handle his finances for him. You can get more info on this from Google and the SS administration website. is one such service.

  • I’m drowning in credit card debt and I’m scared to ask for help.

    • Thomas Bright

      I hope you will contact us if you haven’t already! Our clients love the confidential service they can receive through phone or Internet counseling, and we can pair you with other local resources if they can help your situation. Seriously, asking for help is often the hardest part of this battle. Once you do it, things may be much easier from there.

  • Delores Lyon

    Thanks for sharing this information on credit counseling and how much it should cost. I think it is really awesome that the initial meeting and evaluation of your credit is free– it makes it a lot easier to make that first appointment! However, it is also nice that a debt management program also helps you make those payments for a monthly fee– if it will help you get your credit back up, then it is definitely worth it.

    • Thomas Bright

      Definitely! We hear amazing stories from our clients each day, and you are right–it is definitely worth it!