Credit Card Warning Signs

Tips to Make You a Savvy Consumer

1. High Fees. Beware high fees! If the agency is vague or reluctant to talk about specific fees, go elsewhere.

2. “Voluntary” Fees that Aren’t So Voluntary. Some agencies publicly claim that their fees are voluntary, but don’t pass this information on to consumers. Others will tell you that their fees are voluntary, but will put a lot of pressure on you to pay the full fee, even if you can’t afford it. When you ask about what the agency charges, be sure and ask if they consider any fees to be voluntary.

3. The Hard Sell. If the person at the other end of the line is reading from a script and aggressively pushing debt “savings” or the possibility of a future “consolidation” loan, hang up.

4. Employees Paid by Commission. Most credit counseling agencies are non-profit organizations that are supposed to consider your best interests when offering you counseling options. Employees that receive commissions for placing consumers in debt management plans are more likely to be focusing on their own wallets than yours.

5. They Flunk the “Twenty to Thirty Minute” Test. Any agency that offers you a debt management plan in less than twenty to thirty minutes hasn’t spent enough time looking at your finances.

6. One Size Fits All. The agency should talk to you about whether a debt management plan is appropriate for you rather than assume that it is. If the agency doesn’t offer any educational options, such as classes or budget counseling, consider one that does.

7. Aggressive Ads. Many agencies that advertise treat consumers fairly. However, some are being investigated or sued for deceptive practices. Many others charge unreasonable fees or offer no real counseling. Avoid choosing an agency based on advertising alone. Get referrals from friends or family, find out which agencies have been subject to complaints and talk to a number of agencies before making a decision.

Find out when it is appropriate to utilize this service and who you can trust >>

Disclaimer: The information provided in this site is not legal advice. All information is general information, some of which pertains to legal issues involved in the subject matter. Credit Matters Inc. is not a law firm and is not a substitute for an attorney or law firm. Your access to and use of this site is subject to additional terms and conditions.

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