5. Debt management plan

Pros:

Fixed monthly payments

May reduce your interest rate by up to half

It won’t affect your credit score.

Cons:

Both startup fees and monthly charges are common.

Repaying your debt may take up to five years.

This plan allows you to combine multiple debts into one monthly payment with a lower interest rate. This is a great option for people who have difficulty paying off credit card debt, but are unable to qualify for other options due to their low credit score.

Your credit score is not affected by debt management plans, unlike some credit card consolidation options. bankruptcy might be a better choice if your debt exceeds 40% of your income, and cannot be repaid in five years.

A nonprofit credit counseling agency can help you find a plan to manage your debt.