How to identify a debt consolidation scam

Many people who are terrified because of their overwhelming want to get rid of the endless collection calls from different credit card companies or collection agencies. They are ready to pay a certain amount to some company who will help them to get rid of these calls and deal with their creditors.

You may be stressed off with too many credit card debts and are looking for a solution to resolve your debt problems; there are many debt consolidation companies who will offer their help by dealing with your creditors and combining all your debts under one easy repayment plan. Be careful when you are choosing a debt consolidation company when you are already frightened because of high balances in credit card debt. You don’t want to get ripped off by some debt consolidation company who claims that they will help you come out of this horrifying situation and put you more into debts.

There are many credit consolidation scams that are waiting to catch an unwary customer and make them their target. Sometimes when people are stressed and are looking for a debt solution overlook the terms and conditions set by these cons and as a result, you end up falling into more debts. They will charge you upfront fees and other hidden fees which were not mentioned in the contract when you signed up with them. They will try every possible ways to retain their services by guaranteeing you 110% that your debt problems will be resolved. It is actually never going to happen.

Beware of such companies. Calm yourself down and check the company thoroughly on the internet. You will come to know about any negative feedbacks from other customers who are dealing or have already dealt with them.  Here are some sign of “Debt Consolidation” scams which you should be aware of:

Quote unusually low monthly payments: A legitimate debt consolidation company will have a certain minimum amount to qualify in their program. They cannot go lower than the minimum amount which your creditor will never accept. By offering you an amount that is easy for you to pay, they are actually trying to make some money from you and they are not going to send it to your creditor. Once you have enrolled in their program and been with them for a few months, they will raise the monthly payment all of a sudden. By this time, you might have already paid a lot to them which never went to your creditors and they will still try to make more from you.

Charge high upfront fees: This is the most common scam where illegal companies charge a very high fee in the beginning and promise that a portion will be refunded back after the program is completed. Only a smaller percentage of people are actually able to complete the program. The best way to search for a company is to check with the legal authorities in your area. From there, you will come to know about any previous complaints against these companies and specific reasons. A legitimate company will charge a flat monthly fee for each/all the accounts included in their program and a few may or may not charge a certain percentage on the amount of debts.

Request for your account number before hand: a reputed debt consolidation company will be able to offer you the free quote by knowing the names of your creditors, balances and the interest rates on those accounts. They should not ask for your account numbers, social security number until you have decided to sign up for their program. If you fall into the hands of a scam company and give your personal information, you open yourself up to an identity theft.

When you are looking for consolidation of credit card accounts, a reputed debt consolidation company will work out a realistic plan and will address all your concerns and worries. He will make sure that you have understood the process before you sign up for their program.

Don’t Pay Full Price at the Pump

The next time you go to the pump and fill up your car, try and remember that there are ways around not paying full price. Yes, the way of saving is legal and anyone with decent credit can do it. How does it work you might add? It’s simple, it’s called a gas credit card.

Gas credit cards work like any other regular credit card but they focus more on giving you gas rewards. Depending on what kind of credit card you apply for, it will depend on what you’ll be able to save.

Generally, if you apply for a gas station only credit card, you’ll find that your savings will be a little bit more than a cash back card that gives you rewards on everything.

What kind of gas credit card you should apply for?

When you’re doing your research, figure out if you want to go to only one gas station in your area or have a card that can be used anywhere. Keep in mind that with the sole gas card that can only be used at one gas station will save you a little bit more money. Studies show that a gas card for one gas station will give you about five percent compared to a card that can be used anywhere which will give you about three percent.

The next time you fill up at the pump, think of this little article and know that you could possibly be saving a few cents per gallon. It will all add up in the long run!

Debt Consolidation is a Simple Way to Get out of Credit Card Debt

One of the simplest ways to solve your problem of overwhelming credit card debt is though debt consolidation. With the economy struggling, it is becoming more and more common for people to acquire uncontrollable amounts of debt. Credit card bills are often the main problems, partially because of their very high interest rates. Many times, people can only pay back the interest, which doesn’t help with the initial debt.

Between student loans and credit card debt, the average household has debt of $8000. This, when paying high interest, causes major budget problems every month. Credit card debt consolidation is the solution.

What actually is the problem?

A big problem arises when someone tries to pay one credit card bill with another. It may seem like a good short term solution, but it actually puts them farther into debt very quickly. Many people fall for the low interest APR credit card without understanding the real rate!

Debt consolidation can help, but it will not instantly solve all problems. It will help make the effort of getting out of debt easier, but it will not eliminate all debts owed immediately. It will still take discipline and time to meet your goal, but at least it becomes possible.

You can reduce credit card debt through a debt consolidation program in the following ways. First, do not take on any additional debt. Be very careful to avoid buying things that are not absolutely necessary. And, for the things that are necessary, you should find ways to get discounts on them through coupons, sales, etc.

Next, talk to a debt consolidation company about your specific situation to see if they can lower your monthly payment, interest rate, or even the balance that you owe. They can give you one monthly payment instead of the variety that you have.

By watching what you spend and consolidating your debt you will be on your way to a debt free life. The emotional freedom that you’ll feel when you see that you are making progress is very rewarding. You will begin to feel free again.

Debt Settlement’s effect on your credit rating

If you’re looking for debt settlement due to the fact that your huge credit card bill payments are out of hold you may be asking yourself how your credit score will be affected as a result of debt settlement. Rather than being interested with your credit card, still, you may need to take the gravity of your current financial situation and re-prioritize. You find, if you’re losing sleep and can’t seem to shake the nervous feeling in the pit of your tummy expected to the fact that you’re just making it through each month, your concerns may be best marked toward getting an answer than attempting to hold on to an acceptable credit score.

Realistically speaking, if you’ve sacrificed, struggled and robbed Peter to pay Paul each month just to keep a decent credit score, has it been worth it? Probably not. If you should happen to enter a debt settlement program and the result is a temporary less-than-perfect credit scores I seriously doubt that you’ll lie awake at night giving this a great deal of thought. Those sleepless nights will likely be a thing of the past once your credit card debt is once again manageable.

As a matter of fact, your credit score may not even be affected as a result of debt settlement, depending on the current status of your various credit card accounts. If you’ve made a few late payments already, and if your credit card balances are quite high or “maxed out,” your credit rating may already be somewhat reduced. In any case, negotiating reduced settlement agreements with your creditors will result in your accounts reflecting zero balances, which will assuredly increase your credit score in time, and save you thousands of dollars – providing you with a debt-free lifestyle within two years – and very possibly much sooner.

Making the decision to attempt debt settlement is difficult, but can bring much relief. Once you’ve made the decision to do so, it’s extremely important to hire a debt settlement company you trust. Use your common sense, and if something just doesn’t seem “right” when you’re speaking with a debt settlement professional, do not allow yourself to be forced into hiring that particular firm. It may be easier said than done, but you’ll want to be sure to hire a firm whose Better Business Bureau record is spotless, and whose fees are not outrageous and taken up front. Customer service should also be a number one priority; your money is very relevant and you’ll want assurance that your questions and concerns will be answered promptly and professionally.

What’s most important when making the decision to settle your debt is making the decision based on what’s most important to you? If you’re willing to forego a good credit rating temporarily in exchange for a debt-free lifestyle and sleep-filled nights, debt settlement is definitely an option you may want to consider.

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