Christian Debt Counseling Guide

In our introduction to the concept of “Christian Debt“, we wrote about two sides of recently unveiled coin. One side was good news: Americans are NOT as in bad of debt as our politicians or common sense tales like to say. Then the bad news: still 1 in 20 households carry a credit card debt of $8,000 or more.

For Christians carrying this amount of credit card debt, let’s take a look at the numbers. At a modest credit card interest rate of 10%, this means that a $100 minimum payment would be divided like this. First, the credit card company would take its share, which is 10% of your total debt – not 10% of your payment. This means $8,000 X .10 = $800/12 months = $66.66. So out of a $100 payment sent to pay down $8000 worth of debt, only slightly more than $30 would go towards your debt, the rest simply goes to the credit card companies. The numbers are even more frightening if there are monthly fees for the privilege of having the credit card, or, worse yet, late fees.

This example was with a credit card at just 10%. The truth is, many of you are likely to be dealing with abhorrent rates that are twice as much. If this is the case, then just to keep your debt at $8,000, with a 20% interest rate you’d have to fork over $133 a month. But you’d never pay the debt down, as this only covers the interest. If you could afford to throw $200 at this debt, less than $70 a month would go towards the debt.

This numbers are rightly frightening for anyone to look at who is dealing with a credit card debt that’s gotten out of control.

At this point, let’s address how Christian Debt Management can help a person who is dealing with a similar financial situation.

A Christian Debt Management company usually begins by offering loan consolidation or a type of credit card debt settlement. This means taking all their debts (loans) and packaging them all together in one loan. The actual debt to the credit card companies is paid off, and in its place, the person has 1 loan total, of which comes from or through the Christian Debt Management company. The reason this is beneficial compared to the previous set up is that this single loan will carry a much lower interest rate than what the credit card companies offer. It is also much easier and less stressful to have a single bill to pay to a single company, once a month, than various bills coming in all times a month from different credit card agencies, all with different interest rates and penalties and so on.

Additionally, many Christian Debt Management companies operate on a non-profit basis. They also will work with a person on more than just the numbers; they offer spiritual guidance and counseling, teaching Bible based financial concepts to help them manage their money and their debt responsibly.

In this sense, beyond offering a competitive interest rate and even operating on a not for profit basis, the spiritual counseling is a big factor that separates a standard financial or debt consolidation company from a Christian Debt Management company. If you are a Christian seeking help with your finances, a Christian perspective on financial management and debt reduction can be the missing piece in your personal financial portfolio.

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Unfortunately, the financial world is ripe with scams. One need only to pay attention to the nightly news to see men and women who are so tied up in worldly pleasures that they see their fellow man only as means of furthering their financial goals. Those struggling with credit card debt found themselves in a situation where they owe enormous sums of money to credit card companies who make money for their shareholders by allowing people to borrow money they cannot afford, and then profiting from this situation by charging interest rates, late fees, and other penalties during the payback period. At the other end of the spectrum, companies sprout up to offer financial services to reduce this debt. This also means they are profiting off the debt of the average man, albeit in a different way.

In waters with so many sharks, how is one supposed to navigate to shore?

In an ideal world, Christian Debt Counseling companies would be a shining beacon of trust amongst all the financial sharks in the waters. The truth is, as Christians, one cannot simply trust the motives of a company who proclaims to offer “Christian debt relief” or “Christian debt solutions”. In the same way you’d rightly assess the validity of any financial services company, we must also look closely at any financial services offered by a Christian perspective before signing any paperwork.

Looking online for Christian-based credit card/debt solutions, I come across many forums and comments from fellow Christians expressing frustration at the spam they’ve gotten from so-called Christian Debt companies. Others complain of being ripped off by companies who only called themselves Christian in an effort to gain instant trust, only to then exploit that trust in the worst of ways for someone who is already struggling financially and is in dire need of help.

What are some ways we can protect ourselves from such unethical companies and persons?

Use the Better Business Bureau to check for any complaints or lawsuits against the company. The Better Business Bureau – usually just called the BBB – keeps files on companies of whom people have filed complaints against. It is one of the easiest ways to find out if other people have had problems with a companies services. It is also free to look up such information. To get started, go to the BBB website where you will be prompted to enter your zip code to find the nearest BBB office to your area. (This service available in the USA and Canada only.)

Ask your pastor or other members of the Church for recommendations. Your pastor may be able to offer some insight into local Christian based financial services, or know someone in the church who does! It’s likely that many congregations will have someone employed in the financial sector who may be able to offer advice as well on reputable companies. You might find someone else whose even used the services of a Christian Debt Counseling company whom could offer some eye-opening insight into their experiences.

Don’t respond to any emails offering debt services. Sadly, if you’ve signed up for many things online, including Christian-based services, it’s likely that your email account has been resold to online marketers and companies. If you’ve given up your email in regards to anything related to debt or credit problems, you’ve probably gotten a fair share of unsolicited email offering services, included so-called Christian Debt relief solutions. As a general rule to protect yourself, never respond to any emails of this nature. A reputable financial services company does not spam to find new clientele.

Express your concerns to the Christian Debt Counseling company itself and see how they respond. If you find any companies offering Christian Debt Counseling or Christian Debt Management services, express your concerns about financial scams in this area. See how they respond. A legitimate company would likely want to ease your mind by showing you that their company has been around X amount of years, helps X amount of clients each year, was able to reduce their debt by X amount of dollars on average, and has all the necessary licenses and financial credentials to offer such services. It also wouldn’t hurt to respectfully inquire as to what it means to them to be a Christian based debt relief company. The response should be revealing! It’s also an excellent idea to find out whether or not they are a profit or non profit Christian Debt service.

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Having to wade through all the snakes in the grass to protect yourself isn’t very fun or enjoyable, but it is a part of turning your life around financially and living out the maxim of taking responsibility for your finances. The “old you” has credit card debt. The “new you” is actively seeking a solution, and isn’t scared to ask the right questions and do the right research to find a Christian Debt Counseling service that can help you learn the financial skills you need and set up a new consolidated loan to pay your bills on time and map out a plan to become free of credit card debt.

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