Debt consolidation - whereby the borrower consolidates all of their credit card debt into a single loan, with a lower API - seems smart in principle but, in reality, borrowers do not consider the monthly cashflow required to make the payments on the new loan, and end up running-up balances on their credit cards again. In other words, consumers have been told that the way to get out of debt is to get more credit, which is clearly not a good solution.

Credit counseling is presented as a mechanism for borrowers to lower their APR but is often provided by the credit card companies themselves to keep borrowers paying interest rather than consolidating into loans or filing for bankruptcy.

There is a lot of shame, anxiety, stress, and depression caused by indebtedness. Providing financial management tools to help borrowers manage track expenses, build and manage a budget, etc might help some proportion of borrowers get on top of the problem. However, many people just stick their head in the sand and hope the problem will go away. People know they should create a budget and stick to it but don't.

This is no different to tackling weight loss - just having a bathroom scale doesn't solve the problem for most people. You have to have the courage to step on the scale every day and the tools to change your eating habits.

What is needed is a solution that gives borrowers the courage to tackle the problem, build healthier habits around financial management, and helps drive long-term behavioral change.