You’re hopelessly in credit card debt and considering chapter.
Wait — you don’t ought to pay all of it once more, a television announcer claims.
There’s “a secret that the credit card companies don’t want you to know.” This “secret” will wipe out card cash owed for a fraction of what you owe, ensures the advert, which is for CreditAssociates, a credit card settlement agency.
“On average, we save our clients in excess of 55 percent of what they otherwise would owe,” CreditAssociates Executive VP Rick Burton suggested The Post.
But critics question some debt-settlement services and their methods.
These companies usually ask a cardholder to change an agreed upon amount every month into an escrow-like account, the Federal Trade Commission writes in a paper. The amount is adequate to repay a settlement that is lastly reached with the card agency.
“Further, these programs often encourage or instruct their clients to stop making any monthly payments to their creditors,” the FTC writes.
Card settlement services are “risky,” in keeping with the Center for Responsible Lending.
CRL says that “in order to enroll into debt-settlement programs, consumers are required to default on their debt, which often results in fees, increased interest rates and sometimes even lawsuits from creditors.”
A credit card analyst, who talked about he would in no way recommend debt-settlement services, complained that even respectable services don’t promote the draw again.
“Settling your debt for less than you owe has a devastating effect on your credit. FICO says someone with excellent credit (a 780 score) could lose 140-160 points due to debt settlement,” talked about Ted Rossman with CreditCards.com.