Credit card debt improving–for some
There’s no doubt that many Americans are paying down their credit card debt. This IndexCreditCard.com news blog frequently provides updates as data are released by the Federal Reserve, credit bureaus and other analysts. For a couple of years now, the trends have been generally positive.
However, those trends can be misleading. It’s true that many of those who have comfortably weathered the credit crunch and recession have changed their behavior, and paid down credit cards. But there are millions of less fortunate consumers for whom debt in general–and credit card debt in particular–is a continuing source of grinding misery.
Getting out of credit card debt
There are four main ways of getting out of credit card debt:
- Pay down your balances as best you can
- Receive credit counselling to help you better manage your debt, and then pay down balances as best you can
- Use a debt settlement firm, which may promise to negotiate with your credit card companies to slash the amount you owe
- Go bankrupt
Credit card debt settlement is a minefield
Bankruptcy may be an unattractive option, but in some cases debt settlement can be even worse. Of course, there must be many honest, well-intentioned firms out there that genuinely negotiate on your behalf with credit card companies. But the industry is irredeemably tainted by the large number that ruthlessly exploit the vulnerable.
Mark Huffman, blogger with the consumer news and information website ConsumerAffairs.com, recently wrote:
“In the past 10 years, the FTC [Federal Trade Commission] and state law enforcement partners have filed more than 250 actions to stop deceptive and abusive practices by members of the debt relief industry. Even so, you should not assume that the remaining companies will always play by the rule.”
The Federal Trade Commissions’ own website talks about, “deceptive and abusive practices associated with debt relief services,” and the Office of the Minnesota Attorney General observes: “There are many fraudulent companies seeking to exploit the fact that many consumers are having a difficult time with credit card bills.”
A press release arrived in IndexCreditCard.com’s inbox this morning from a for-profit company that looks as if it may offer a useful new service to those struggling with debt. But it’s necessary to begin with a caveat: This is a brand new company, and your correspondent has no way of knowing how well the service it offers could work, or whether the promises it makes should be believed.
Having said that, the offer is free and sounds great. You go to the company’s website (readyforzero.com), and give it read-only permission (it can’t carry out transactions) to securely and automatically access your credit card accounts. Afterward, you should receive a montly email telling you how much you should pay on each account in order to eliminate your debt as quickly as possible. That email may also contain offers for loan consolidation services or lower interest accounts. The company makes money from commissions from lenders if you take up one of those options.
There’s no doubt that taking this sort of strategic approach to paying down your credit cards can be hugely beneficial. It’s up to you whether you choose to trust a third party with access to such personal information.
Disclaimer:The information in this article is believed to be accurate as of the date it was written. Please keep in mind that credit card offers change frequently. Therefore, we cannot guarantee the accuracy of the information in this article. Reasonable efforts are made to maintain accurate information. See the online credit card application for full terms and conditions on offers and rewards. Please verify all terms and conditions of any credit card prior to applying.
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