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This brief writing will reveal to you some of the truths about consumer credit counseling programs. These are the facts that result in a failure rate of in some cases over 80% of the clients enrolled in these programs. Debtors should be knowledgable of these facts before they get themselves into a credit counseling program to ensure themselves they are deciding on a decisive financial move.

1. Many of the credit counseling establishments are started and paid for by the actual credit card companies themselves. They serve as a sort of middle man for the credit card issuers to collect the debt amount owed.

2. The credit counseling establishments work for and represent the credit card companies; they do not work on behalf of the client. The credit card organizations stateto the credit counseling company the minimum payment that is required and the interest rate. There is no negotiating at all on this.

3. The credit counseling establishments should be able to reduce the interest rate, however they can't actually reduce the principal balance. The typical APR on one of these programs is around 13% which is more in the middle than actually being very low. By not lowering the principal balance they are not truly a method of credit card debt relief, this is just an sped up payment program.

4. You will wind up actually putting out more than the principal debt amount, due to the monthly fees, APR and lowered monthly payments which drastically extends the amount of time you are going to be stuck in debt.

5. It does have a short term bad impact on your credit score/report and is made a public record on your credit history, during the time you are in the program.

6. Attaining a mortgage while on a credit counseling program becomes very complex, on the edge of being impossible.

7. Here is the kicker and read very carefully. If you fall past due only one payment while on a credit counseling program you will be kicked off and the credit card companies will not allow you to sign into another program for up to a year. Which will put your credit card debts right back to where they were before, high interest and all. This is the reason why upwards of 75% of the clients enrolled in these programs fail out.

I mean think about it for a second. They put you on a credit counseling program that may last 5 years or more. We all know life has its good times and its bad times. If you find it extremely tight to be on the program in the first place you will fail off. Any random financial problems as little or large as they may be can contribute to you going past due just one payment and getting kicked out of the program. You need to sincerely think about how secure your finances and income security are before you enroll into a credit counseling program to evade being part of that 80%. The bottom line is those individuals with a large amount of debt such as $15,000 or more should lean more towards debt settlement than credit counseling. Credit counseling is much more viable for those with smaller amounts of debt that do not have much of any problems keeping up to date with their accounts in the first place. If you are seeking for a way to reduce your debt and get out of debt fast, then credit counseling is just not the way to go.

Steve Bis is a debt analyst and research assistant with the US Consumer Advocate, which primarily practices in credit card debt relief.