When is hiring a debt relief company worth the cost?
Pursuing debt relief can be a smart move but it isn't always worth paying for. Here's when it could pay off.
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Debt has become an increasingly expensive problem to carry over the last few years. While borrowing costs have largely stabilized as the Federal Reserve has kept rates paused since the start of the year, millions of Americans are still carrying high-rate credit card balances , and at an average of nearly 22%, the compounding interest charges make it difficult to meaningfully reduce what's owed. Month after month, the minimum payments often do little more than keep accounts current while interest continues to pile on.
That financial pressure has prompted many borrowers to look beyond traditional repayment strategies for ways to tackle their debt. Rather than simply paying down their revolving balances over time, some borrowers are exploring debt relief companies that offer to negotiate with creditors to try to reduce what's owed. For someone facing years of repayment, that type of promise — and the 30% to 50% balance reductions that come with it — can sound like a smart fix.
But professional debt relief comes with a price of its own. While paying for expert negotiations may save some borrowers money in the long run, the fees aren't insignificant. So, how do you know when hiring a debt relief company is really worth the cost?
Find out more about the debt relief options available to you now .
When is hiring a debt relief company worth the cost?