Everytime I hear these ads I just want to scream! DON’T DO IT! I know it sounds tempting. I know you have lots of debt and you don’t know how you are ever going to get out from under it, but trust me, this is one secret you don’t need to know. So this is how it goes. According to Debt Elimination Companies there are secrets the credit card companies don’t want you to know. If you have $5,000 or $10,000 or even $20,000 in credit card debt, just call this respectable sounding debt reduction company(DRC). They will use their secret powers with the credit card companies and eliminate 40-60% of your credit card debt.
Don’t believe it for a minute! Your scam alerts should be going off big time!
How this works is you sign up with debt reduction company and pay them a nice big fee. It can be as high as $3,000. You might even put it on your credit card. It’s OK, they are going to save you thousands of dollars, and even their fee that you just put on your card will be reduced by 40-60%. Then they work with you to come up with just one monthly payment that is less than the mulitple payments you are currently making to your credit card companies. So far so good. But then, instead of sending your payments to your credit card company, you send the payment to the DRC. All is well for a month or two. And then the phone calls will start. Nasty phone calls from people demanding that you pay your bill. They might even call you at work! You see, the DRC has not been making your credit card payments. They have been holding onto the cash. If you call them and ask them why, they will tell you it is all part of the secret. Be patient, don’t let the phone calls get to you, and keep sending your payments to the debt reduction company.
So here is the secret the credit card companies don’t want you to know. If you don’t pay any of your credit card bills for over 90 days, your credit report will become full of the dreaded “90 day lates.” This totally trashes your credit score. Some say it is worse than going bankrupt. The credit card companies decide you are a no good bum. They are pretty sure they are never going to see their money again. Then, if you offer to settle your debt with them, even for way less than you owe, they might just take you up on the deal.
After all, some money is better than no money.
This is where the DRC is supposed to step up and take all those payments you have been sending them (minus fees of course) and negotiate for you to settle your credit card debts “for pennies on the dollar”. But many people find out at this time that the DRC has taken their money and left town. So now you have even less money to pay the credit card companies and your credit rating will take years to recover.
So now you know the secret. If you are becoming overwhelmed with credit card debt there are better ways to handle it. Contact the Association of Independent Consumer Credit Counseling Agencies. They will set you up with a legitimate credit counseling service in your area where you will learn money management skills and work out a payment plan that won’t leave your creditors hating you. You might even get a lower interest rate, and sometimes some forgiveness on your credit card debt.