Debt relief programs: pros and cons

Here at MoneyFor, our goal is to help you make informed financial decisions. We are committed to accuracy and impartiality in all our content. It’s important to note that articles may reference products from our partners who compensate us. This influences which products we feature and their presentation on our site, not our evaluation.

Key takeaways

Debt relief strategies range from structured programs from credit counselors and debt settlement to DIY strategies and even bankruptcy.
Understanding debt restructuring pros and cons is crucial for choosing the right debt relief method for your situation.
Consulting with financial professionals can provide resources, education, and help you choose the best path to financial stability.

Debt relief programs help people manage overwhelming bills, pay dues efficiently, and potentially reduce what they owe. As consumer credit card debt grows, the number of people who seek debt relief is increasing.

There are many different types of debt relief – debt consolidation loans, debt settlement, credit counseling, or even bankruptcy. You can do it yourself or work with an outside agency. Each method has its own benefits – reduced interest rates or waived fees – and drawbacks – your credit score takes a hit. What method you choose depends on your individual circumstances and goals.

This article explores the pros and cons of debt restructuring. We’ll walk you through the different strategies, tactics, and services out there so that you can choose the one that speaks to you.

How a debt relief program works

Debt relief is a broad term covering a range of measures used to pay off what you owe. It can be a formal structured program or simply strategies you employ. Some methods reduce the total amount you need to repay, while others provide a plan that makes repayment more manageable.

Is a debt relief program a good idea? Yes, it can be a good idea for anyone with overwhelming debt. Most debt relief companies help with unsecured debts. They can help you pay off what you owe more effectively and in less time than if you did it on your own.

Before choosing a debt relief program, consider the advantages and drawbacks. Understanding the debt restructuring pros and cons is critical. Not every program is for everyone. The right program depends on your current debt level, income, ability to make disciplined payments, and credit score. Most options will initially negatively impact your credit score – some, like debt settlement and bankruptcy, have a long-term negative effect – and cost money. It’s essential that you thoroughly read what each method entails and make an informed decision that aligns with long-term financial goals.

Types of debt relief programs

Relief programs come in various forms, each with unique benefits and drawbacks. Common types include:

Debt consolidation
Debt settlement
Credit counseling
Debt management plan
Bankruptcy

Each debt relief strategy suits different financial situations and requires careful consideration. Understanding the debt restructuring pros and cons of each method, including their effects on credit scores, costs, and repayment terms, can help in choosing the right one for your circumstances. Assessing factors such as the total amount you owe, income stability, and long-term financial goals is crucial in making an informed decision.

Debt consolidation

Consolidation is when you roll two or more bills into one. It can simplify your monthly debt payments and, when done right, will lower your interest rate, saving you money. Fees may apply, and you’ll need to be sure to secure a lower interest rate for it to work.

Pros: Simplifies payments, lowers interest rates, and improves credit score if managed well.

Cons: Initial score dip, may extend repayment period (increase total interest), additional fees, need a very good score.

There are no debt consolidation companies. Consolidation is something you do on your own or through a credit counseling agency. If you go through an agency, it’s considered a debt management plan.

Apply for a debt consolidation loan

The most common way to consolidate debt is to take out a debt consolidation loan. You apply for a personal loan with a lower APR (annual percentage rate) and use the money to repay your creditors. This leaves you with one monthly payment that should be lower than what you were paying previously. Most personal loans have lower APRs than credit cards, but the exact interest rate you secure will depend on your credit score. The single monthly payment will simplify your finances and make it less likely to have missed payments or late fees.

Use a balance transfer credit card

Another option is to use a balance transfer credit card with a promotional 0% APR (or simply a lower APR). You transfer your high-interest credit card balances onto the new card and pay it off before the promotional period ends. The reduced interest rate can save you money and help you pay off your balances faster. Balance transfer fees may apply and you have to pay off your total balance before the promotional period ends.

Are you struggling with payday loans?

Payday loan consolidation could be the answer.

Debt settlement

Debt settlement or credit card modification involves negotiating with creditors to make a lump sum payment that is less than you owe. This approach can significantly lower the amount you need to repay but is inherently risky.

Pros: Reduces total amount paid, provides a quick resolution.

Cons: Severely impacts credit score, potential tax implications, late fees can add up, fees from settlement companies, not guaranteed to work.

Most people choose to work with a debt settlement company as they have expertise. Many debt settlement companies will ask you to stop paying your creditors and instead make payments into a dedicated account. Once enough funds have accumulated, the company negotiates with your creditors to accept a smaller lump sum payment. The idea is that the creditor will agree to a lower amount as they’d rather receive something than nothing. Most debt settlements occur when an account is more than 150 days past due.

As with anything else, credit card modification has pros and cons. Yes, you can pay less than you owe, but creditors have no legal obligation to negotiate. While you’re working on your debt settlement plan, you stop making payments. This means the amount you owe will grow, and late fees and missed payments will all add up, hurting your credit score. If the forgiven debt exceeds $600, it is considered taxable income by the IRS. Debt settlement does not cover secured debt. Lastly, the debt settlement company will charge a fee of 15% to 25% of the original amount for their services.

Debt settlement certainly is a way to get out of what you owe and save money, but it’s inherently risky and can do a lot of damage to your score.

Want to learn more about credit counseling and DMPs?

Click here to read about the pros and cons and see if they’re for you.

Credit counseling

Credit counseling and debt management services are offered by both for-profit and nonprofit credit counseling agencies. If you can, go with a nonprofit credit counseling agency accredited by the Financial Counseling Association of America (FCAA). These agencies provide financial education, money management advice, budgeting tools and more to help people with their personal finance issues.

Pros: Professional guidance, structured debt repayment plan, potential lower interest payments and waived fees, no more calls from collection agencies.

Cons: Requires closing credit accounts, initial credit score dip, monthly fees for counseling services.

Debt management plans

A debt management plan (DMP) is one of the services offered by credit counselors. The counselor will look at what you owe, your income, and your expenses. They will then create a payment plan tailored to your budget. They may negotiate with credit card companies for a reduced interest rate and waived fees. You make one payment each month to the credit counseling agency, and they distribute the money among your creditors according to the agreed-upon schedule. The idea is to make your monthly payments affordable.

For a DMP to work, you have to stick to the plan and may be required to close credit card accounts.

DIY debt relief

You can DIY (do it yourself) debt relief like you can with anything else. Most people start with strict budgeting and strategies like the snowball method (prioritize smallest amounts first) and the avalanche method (pay off highest interest rates first). The right choice depends on the type of motivation you need. The snowball method will give you quick wins, while the avalanche method saves you money.

Pros: Full control over repayment plan, no fees, improved financial literacy.

Cons: Requires strong discipline and negotiation skills, no professional support.

You can also negotiate directly with credit card companies to reduce the amount you owe. Call your creditor and request that they waive fees, lower interest rates, reduce monthly payments, or even settle for a smaller sum. Creditors are often willing to work with you if it means they’ll receive some payment rather than none. It helps if you’ve been a good customer in the past and are polite and honest.

The main advantage of DIY is you’re not paying any fees to a third-party. The drawbacks are that you must keep yourself motivated and don’t necessarily have the negotiation expertise a professional debt settlement company or credit counselor does. DIY can be a good place to start and then determine if you need extra help.

Searching for a way out?

Get out of credit card debt in five steps!

Avoiding bankruptcy

Bankruptcy is a last resort. While it can offer a fresh start it comes with significant long-term consequences. Your credit score will take a huge hit – bankruptcy remains on your credit report for up to ten years – and can impact future borrowing abilities.

Pros: Discharges most unsecured debts, offers a fresh financial start, stops calls from collection agencies.

Cons: Long-term negative credit score impact and potential loss of assets.

Bankruptcy is a long and costly legal proceeding and it’s not even guaranteed to work. Yes, credit card debts and personal loans can be forgiven, but not all qualify, and legal fees add up. If you file Chapter 7 bankruptcy, you may lose your assets. Chapter 13 bankruptcy lets you keep your assets, but you have to follow a court approved repayment plan that can last three to five years.

Talk to a credit counselor and try other options before you resort to bankruptcy.

How do you qualify for debt relief?

How to qualify really depends on the service you’re interested in. In general, you have to have a substantial amount of unsecured debt to be eligible.

Unsecured debt includes:

Credit card debt
Personal loans
Medical bills
Utility bills

Most debt settlement companies require at least $7,500 in unsecured debt, though they would prefer you to have $10,000 to $20,000. Having a larger balance can give them more leverage during negotiations plus it means they can charge a higher fee.

For bankruptcy, experts say it’s only worth it if you owe at least $10,000 due to the costs. To file for Chapter 7, you must prove that you do not earn enough to repay dues and that your income is less than the median income of your state. To file for Chapter 13, you must owe less $2,750,000 in total and be current on all tax filings. You cannot file for bankruptcy if you did so recently.

There is no required amount for credit counseling or a DMP. However, for a DMP to work, you must have a steady enough income to make consistent monthly payments. You will also need to owe a large enough amount for it to be impossible to fix with better budgeting.

Consolidation qualifications depend on your credit score. To secure a low-interest personal loan or balance transfer card, you will have to have good to excellent credit. You also must have sufficient income to repay the new loan or pay off the card balance.

Go to MoneyFor to learn more about personal finance!

Impact on your credit score

Once again, the impact on your credit score depends on the method chosen. In general, your score will suffer initially and then rebound as you establish responsible financial habits.

Consolidation: Any time you apply for a new credit account your score will take a dip due to the hard inquiry. As you consistently make on time payments on your new loan or balance transfer card, your score will go up. A positive payment history will negate any initial credit score dip.

Debt settlement: One of the significant disadvantages of debt restructuring is it will hurt your score. You have to stop making payments, which is the worst thing you can do. If the creditor agrees, the settled debt is reported as a negative item on your credit report. This can further lower your score and remain on your credit report for up to seven years.

Debt management plans: Enrolling in a DMP typically requires closing your credit accounts, which can hurt your score and as it decreases your credit utilization ratio and length of credit history. However, as you make consistent payments, your score will improve and typically ends up better than it was you you started the program.

Bankruptcy: Bankruptcy can cause your score to drop by 100 to 250 points and will stay on your report up to ten years. It will make difficult to open new credit accounts in the future.

Be aware of scams

Like with anything else, the debt relief industry has its share of scams. Common tactics include:

Unsolicited offers: Be cautious of unsolicited phone calls, robocalls, or messages offering debt relief services. Legitimate companies typically do not reach out to consumers without their request or consent.
Upfront fees: Scammers may ask for upfront payments or fees before providing any services. In many cases it is illegal to request upfront payments.
Guaranteed results: Be wary of anyone that guarantees specific results or make unrealistic promises. No legitimate company can guarantee specific outcomes or immediate relief.
Affiliation claims: Some scammers may falsely claim to be affiliated with financial institutions, lenders, or government programs to gain trust. Debt relief companies are typically third-party service providers and are not affiliated with lenders.
Lack of transparency: Scammers may lack transparency in their operations, contracts, or fee structures. Legitimate companies are transparent about their services, fees, and the potential risks involved.

To protect yourself, research any company thoroughly before you sign up with them. Check for reviews with the Better Business Bureau (BBB) and verify the legitimacy of the company. Consider reaching out to consumer protection agencies like the Federal Trade Commission (FTC) or the Consumer Financial Protection Bureau (CFPB) if you suspect a scam.

Alternative relief strategies

If none of those seem like the right fit, there are several alternative strategies to consider to get out of debt faster.

Increase your income: Taking on a second job, freelancing, or joining the gig economy can boost your income and make it easier to pay off personal loans.

Reduce expenses: Create a detailed budget and cut all non-essential expenses. This might involve lifestyle changes such as downsizing housing, eliminating subscriptions, or cooking at home more often.

Sell assets: Selling unused or valuable items, such as electronics, jewelry, or even a second vehicle, can provide extra cash to cover bills.

Loans from family or friends: Borrowing money from family or friends at little to no interest can be a quick way to repay creditors without taking out additional personal loans. Ensure the terms are clear to maintain healthy relationships.

Financial hardship programs: Some creditors offer financial hardship programs that provide temporary relief, such as reduced interest rates or modified payment plans. These programs are typically designed for individuals facing temporary financial difficulties.

Home equity options: If you own a home, consider tapping into your home equity through options like a home equity loan or line of credit to pay off high-interest credit card balances.

Government assistance programs: Government programs can help with mortgages, utility bills, medical care, and more. Partaking in these programs – both state and federal – can free up funds to pay other bills.

Debating between paying bills and saving money?

Click here to find out if you should pay off debts or save money.

Bottom line

There are plenty of strategies to help you pay off what you owe effectively. Consider the various options from debt management to debt settlement. Think about what you can afford and how each method affects your credit score and financial health in the long term. Research companies to make sure anyone you work with a reputable. A good starting point is chatting with a nonprofit credit counselor with the financial education to point you in the right direction.

Ultimately, the goal is to regain control of your personal finances, pay all your dues, save money, and pave the way for a more secure financial future. There are plenty of ways to get yourself back on the right track.

1. Paycheck Advance is For eligible customers only. Your actual available Paycheck Advance amount will be displayed to you in the mobile app and may change from time to time. Conditions and eligibility may vary and are subject to change at any time, at the sole discretion of Finco Advance LLC, which offers this optional feature. Finco Advance LLC is a financial technology company, not a bank. Expedited disbursement of your Paycheck Advance is an optional feature that is subject to an Instant Access Fee and may not be available to all users. Expedited disbursements may take up to an hour. For more information, please refer to Paycheck Advance Terms and Conditions.

2. Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group, Member FDIC, and Cross River Bank, Member FDIC. The Current Visa® Debit Card is issued by Choice Financial Group pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted. The Current Visa® secured charge card is issued by Cross River Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted. Please see the back of your Card for its issuing bank. Current Individual Account required to apply for the Current Visa® secured charge card. Independent approval required.

3. Individual results may vary. Using your credit card responsibly may allow you to improve your credit score. Credit building depends on various factors, including your payment history, credit utilization, length of credit history, and other financial activities.

4. Faster access to funds is based on comparison of traditional banking policies and deposit of paper checks from employers and government agencies versus deposits made electronically. Direct deposit and earlier availability of funds is subject to timing of payer’s submission of deposits.

5. Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group. Funds held in Savings Pods are FDIC-insured on a pass-through basis up to $250,000 at our partner bank Choice Financial Group, member FDIC

6. Actual overdraft amount may vary and is subject to change at any time, at Current’s sole discretion. In order to qualify and enroll in the Fee-Free Overdraft feature, you must receive $500 or more in Qualifying Deposits into your Current Account over the preceding 30-day period. For more information, please refer to Fee-free Overdraft Terms and Conditions.

7. You may earn Points in connection with your everyday spending and by completing other actions that Current designates as subject to the Current Points Program. The amount of Points granted for different actions as well as the purchase requirements necessary to earn Points will vary, and is subject to Current’s sole discretion. After qualifying, please allow 3-5 business days for points to post to your Current account. The Current Points program is not available to Teen Account holders. See Current Points Terms and Conditions.

8. Some fees may apply, including out of network ATM fees of $2.50 per transaction, late payment fees of 3% of any total due balance outstanding and past due for two or more billing cycles, foreign transaction fees of 3% of the full transaction amount (minimum $0.50), card replacement fees per card of $5 for regular delivery and $30 for expedited delivery, cash deposit fees of $3.50 per deposit, and third party processing fees.

9. Boost Bonuses are credited to your Savings Pods within 48 hours of enabling the Boost feature and on a daily basis thereafter, provided that the Savings Pod has accrued a Boost Bonus of at least $0.01. The Boost rate on Savings Pods is variable and may change at any time. The disclosed rate is effective as of August 1, 2023. Must have $0.01 in Savings Pods to earn a Boost rate of either 0.25% or 4.00% annually on the portion of balances up to $2000 per Savings Pod, up to $6000 total. The remaining balance earns 0.00%. A qualifying direct deposit of $200 or more is required for 4.00%. No minimum balance required. For more information, please refer to Current Boost Terms and Conditions.

10. Cryptocurrency services are powered by Zero Hash LLC and Zero Hash Liquidity Services LLC, and may not be available in all states. Terms and conditions apply. When you buy or sell cryptocurrency, a difference between the current market price and the price you buy or sell that asset for is called a spread. However, unlike most other exchanges Current does not charge an additional trading fee. Cryptocurrency transactions are a form of investment, and all investments are subject to investment risks, including possible loss of the principal amount invested. Cryptocurrency is not insured by the FDIC or any other government-backed or third-party insurance. Your purchase of cryptocurrency is not a deposit or other obligation of, or guaranteed by, Choice Financial Group or Cross River Bank. The cryptocurrency assets in your Zero Hash account are not held at Current, Choice Financial Group, or Cross River Bank. Current, Choice Financial Group, and Cross River Bank are not responsible for the cryptocurrency assets held in any Zero Hash account. Neither Current, Choice, nor Cross River Bank is involved in the purchase, sale, exchange of fiat funds for cryptocurrency, or custody of the cryptocurrencies. Terms and Conditions apply (platform and user agreements). Crypto on Current is not currently available in HI. Licensed to engage in Virtual Currency Business Activity by the New York State Department of Financial Services. This does not constitute investment advice.

11. Current is a financial technology company, not a bank. Banking services provided by Choice Financial Group. Your money is FDIC-insured on a pass-through basis up to $250,000 at each of our partner banks, Choice Financial Group and Cross River Bank, members FDIC.

12. Average value based on Fine Hotels + Resorts bookings in 2023 for stays of two nights. Benefits include daily breakfast for two, room upgrade upon arrival when available, $100 amenity, guaranteed 4PM late checkout, and noon check-in when available. Certain room categories not eligible for upgrade. $100 amenity varies by property. Actual value will vary based on property, room rate, upgrade availability, and use of benefits.

13. Up to $500 per Covered Trip that is delayed for more than 6 hours; and 2 claims per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

14. The maximum benefit amount for Trip Cancellation and Interruption Insurance is $10,000 per Covered Trip and $20,000 per Eligible Card per 12 consecutive month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

15. Baggage Insurance Plan coverage can be in effect for Covered Persons for eligible lost, damaged, or stolen Baggage during their travel on a Common Carrier Vehicle (e.g. plane, train, ship, or bus) when the Entire Fare for a ticket for the trip (one- way or round-trip) is charged to an Eligible Card. Coverage can be provided for up to $2,000 for checked Baggage and up to a combined maximum of $3,000 for checked and carry-on baggage, in excess of coverage provided by the Common Carrier. The coverage is also subject to a $3,000 aggregate limit per Covered Trip. For New York State residents, there is a $2,000 per bag/suitcase limit for each Covered Person with a $10,000 aggregate maximum for all Covered Persons per Covered Trip. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

16. Car Rental Loss and Damage Insurance can provide coverage up to $75,000 for theft of or damage to most rental vehicles when you use your eligible Card to reserve and pay for the entire eligible vehicle rental and decline the collision damage waiver or similar option offered by the Commercial Car Rental Company. This product provides secondary coverage and does not include liability coverage. Not all vehicle types or rentals are covered. Geographic restrictions apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company. Car Rental Loss or Damage Coverage is offered through American Express Travel Related Services Company, Inc.

17. Coverage for a Stolen or damaged Eligible Cellular Wireless Telephone is subject to the terms, conditions, exclusions, and limits of liability of this benefit. The maximum liability is $800, per claim, per Eligible Card Account. Each claim is subject to a $50 deductible. Coverage is limited to two (2) claims per Eligible Card Account per 12 month period. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by New Hampshire Insurance Company, an AIG Company.

18. When an American Express® Card Member charges a Covered Purchase to an Eligible Card, Extended Warranty§ can provide up to one extra year added to the Original Manufacturer’s Warranty. Applies to warranties of five (5) years or less. Coverage is up to the actual amount charged to your Card for the item up to a maximum of $10,000; not to exceed $50,000 per Card Member account per calendar year. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

19. Purchase Protection is an embedded benefit of your Card Membership and requires no enrollment. It can help protect Covered Purchases made on your Eligible Card when they’re accidentally damaged, stolen, or lost, for up to 90 days from the Covered Purchase date. The coverage is limited to up to $10,000 per occurrence, up to $50,000 per Card Member account per calendar year. Coverage Limits Apply. Eligibility and Benefit level varies by Card. Terms, Conditions, and Limitations Apply. Please visit americanexpress.com/benefitsguide for more details. Underwritten by AMEX Assurance Company.

20. Chime is a financial technology company, not a bank. Banking services provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC.

21. The secured Chime Credit Builder Visa® Card is issued by Stride Bank, N.A., Member FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa credit cards are accepted.

22. Banking services and debit card provided by The Bancorp Bank N.A. or Stride Bank, N.A., Members FDIC, pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit cards are accepted.

23. The Annual Percentage Yield (“APY”) for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

24. There’s no fee for the Chime Savings Account. Cash withdrawal and Third-party fees may apply to Chime Checking Accounts. You must have a Chime Checking Account to open a Chime Savings Account.

25. To apply for Credit Builder, you must have received a single qualifying direct deposit of $200 or more to your Chime Checking Account. The qualifying direct deposit must be from your employer, payroll provider, gig economy payer, or benefits payer by Automated Clearing House (ACH) deposit OR Original Credit Transaction (OCT). Bank ACH transfers, Pay Anyone transfers, verification or trial deposits from financial institutions, peer to peer transfers from services such as PayPal, Cash App, or Venmo, mobile check deposits, cash loads or deposits, one-time direct deposits, such as tax refunds and other similar transactions, and any deposit to which Chime deems to not be a qualifying direct deposit are not qualifying direct deposits.

26. Money added to Credit Builder will be held in a secured account as collateral for your Credit Builder Visa card, which means you can spend up to this amount on your card. This is money you can use to pay off your charges at the end of every month.

27. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

28. On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

29. Early access to direct deposit funds depends on the timing of the submission of the payment file from the payer. We generally make these funds available on the day the payment file is received, which may be up to 2 days earlier than the scheduled payment date.

30. SpotMe® on Debit is an optional, no fee overdraft service attached to your Chime Checking Account. To qualify for the SpotMe on Debit service, you must receive $200 or more in qualifying direct deposits to your Chime Checking Account each month and have activated your Visa debit card. Qualifying members will be allowed to overdraw their Chime Checking Account for up to $20 on debit card purchases and cash withdrawals initially but may later be eligible for a higher limit of up to $200 or more based on Chime Account history, direct deposit frequency and amount, spending activity and other risk-based factors. The SpotMe on Debit limit will be displayed within the Chime mobile app and is subject to change at any time, at Chime’s sole discretion. Although Chime does not charge any overdraft fees for SpotMe on Debit, there may be out-of-network or third-party fees associated with ATM transactions. SpotMe on Debit will not cover any non-debit card transactions, including ACH transfers, Pay Anyone transfers, or Chime Checkbook transactions. SpotMe on Debit Terms and Conditions.

31. Tipping or not tipping has no impact on your eligibility for SpotMe®.

32. Out-of-network ATM withdrawal fees may apply except at MoneyPass ATMs in a 7-Eleven, or any Allpoint or Visa Plus Alliance ATM.

33. Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.

34. Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.

35. Mobile Check Deposit eligibility is determined by Chime in its sole discretion and may be granted based on various factors including, but not limited to, a member’s direct deposit enrollment status.

36. Funds are automatically debited from your Checking Account and typically deposited into the recipient’s Checking Account within seconds. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed.

37. Pay Anyone transactions will be monitored and may be held, delayed or blocked if the transfer could result in fraud or another form of financial harm. Sometimes instant transfers can be delayed. Non-Chime members must use a valid debit card to claim funds.

* EarnIn is not available for Connecticut residents

Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor’s credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor’s degree in journalism and an MBA.

Debt Relief Programs: Pros and Cons

Key takeaways

Jump to:

How a debt relief program works

Types of debt relief programs