How Credit Unions Can Empower Members to Tackle Debt

For many Americans, managing debt is a top financial priority. Among users on the Paperwork platform, for example, debt reduction ranks as the number one concern - reflecting a widespread need for support in this area. Credit unions have an opportunity to empower members on their debt management journey through a combination of expert counseling, digital tools, and accessible resources. Together, these tools create a powerful ecosystem that helps members take control of their debt and work toward lasting financial stability.

1. Expert counseling

Debt counseling programs from organizations like BALANCE provide members with one-on-one guidance on budgeting, credit, and debt management. By partnering with these organizations, credit unions can offer members targeted support from specialists who help reduce debt more strategically.

For credit unions with in-house financial coaches, adding specialized debt counselors further enriches the support network. This dual approach means members receive both comprehensive financial coaching on everyday financial health, plus targeted expertise specifically related to debt management—equipping them to tackle even the most complex debt situations.

2. Digital tools

Digital tools can be instrumental in augmenting coaching efforts, offering members a seamless  way to stay engaged with their financial goals. Mobile apps, for example, that integrate budgeting, goal tracking, personalized alerts and important reminders, help members stay on track outside of counseling sessions. These tools keep members engaged with their debt-reduction journey between appointments, providing timely insights and actionable steps. This hybrid approach of augmenting counseling with digital tools and resources is a powerful way of keeping members engaged, while also making them feel supported, heard and understood.

3. Debt consolidation loans

Credit unions can also educate members on debt consolidation loans, which can help members combine multiple high-interest debts into one manageable monthly payment, often at a lower interest rate. For members juggling multiple credit card balances or personal loans, debt consolidation can simplify repayment, reduce interest expenses, and make it easier to stay on track financially. By aligning debt consolidation options with counseling support, credit unions provide a structured way for members to reduce their financial burdens.

Debt consolidation loans not only help reduce financial stress but can also improve credit scores by replacing multiple smaller balances with a single, regularly serviced loan - further improving overall financial wellness.

4. Educational resources

Empowering members to manage debt also means equipping them with knowledge for the future. Through webinars, workshops, and online resources, credit unions can offer members valuable insights on budgeting, credit improvement, and debt reduction. Educational initiatives help members build skills and confidence to make sustainable financial decisions—reducing the likelihood of debt in the future.

5. Conclusion

By offering a combination of expert counseling, digital tools, and tailored products and resources, credit unions have the ability to create a robust system that empowers members to tackle debt head-on. At Paperwork, we support credit unions in delivering these comprehensive solutions, helping members achieve lasting financial stability.

For more information, schedule a consultation with us today.