Shameless Plug: Don’t Fall for the Debt Consolidation/Debt Elimination/Credit Score Hype
It’s amazing how bad this is getting:
….. Credit doctors are sprouting all over the country, promising — for a fee — to knock down the frightening amounts that borrowers owe to credit-card companies. Their hard-sell ads are the latest sign that more and more debtors are growing desperate, that the four most nagging addictions in modern American life are nicotine, caffeine, alcohol — and credit cards.
….. Enter the self-described consolidators, who are created by the lenders to deal with die-hard deadbeats. They pull together all the debtors’ assets and make up a schedule of repayment. The debtors then pay one pretty big check every month to the consolidator instead of many relatively small checks to the individual creditors. For this, the debtors may pay a fee of 10 percent of their total debt.
….. Still other companies claim that they almost effortlessly can arrange to increase your credit score. But about the only way they can do this is to petition the scorekeeping credit agencies to wipe out or reduce any false or inflated charges in your record. You could just about as easily do this yourself.
Warns the Federal Trade Commission: “[Some companies] promise, for a fee, to clean up your credit report so you can get a car loan, a home mortgage, insurance or even a job. The truth is, they can’t deliver. After you pay them hundreds or even thousands of dollars in fees, these companies do nothing to improve your credit report; most simply vanish with your money.”
Adds Scott Kays, president of Kays Financial Advisory Corp. in Atlanta: “Common sense says that if they’re paying for TV ads, they gotta be charging higher fees.”
Radio time and banner ads aren’t inexpensive either.
There’s a better way — one that will work:
Do it yourself. CYMnow.com makes it as easy as it gets to see exactly where you stand, to identify areas where you can economize, and to see how long it will take to get that debt burden off your back.
Interesting, and not surprising. It seems like there’s a critical mass coming up against the credit card industry — witness Chase apologizing and two hearings already.
Speaking of shameless plugs, I’m working with UnfairCreditCardFees.com, sponsored by the Merchants Payments Coalition on the issue of interchange fees. I.e. they’re absurdly, artifically high and appear to be that way because of collusion. It’s been mentioned in the hearings but hasn’t been front and center — probably because the fee is directly charged to merchants, and only to consumers indirectly.
One thing we’d like: more transparency. Another thing: allowing for a cash discount or credit surcharge.
Comment by Jaliman — March 11, 2007 @ 8:43 pm
#1, I am in sympathy with some of what you’re suggesting.
I think at the consumer level, fees are too high. I’m not as convinced at the merchant level, even though I sell a relatively small-ticket item, as you can see.
I believe that MC, Visa, DC and Amex DO compete, and that if there was ever any doubt in that area, PayPal should have removed. I can be persuaded otherwise, of course.
I also think the merchants who don’t like the fees should serious consider setting up their own network, or start working very hard with someone like GE Capital, or maybe Wal-Mart, to establish a merchant card network.
I also think everyone underestimates the comparative PITA and exposure involved in handling cash and checks.
Comment by TBlumer — March 11, 2007 @ 9:55 pm