Credit Card ‘Forgiveness’ Programs Are Usually Scams. 10 Red Flags to Look For

For millions of Americans, relief from credit card debt feels unobtainable. So when an offer comes in the mail offering credit card forgiveness, you might be eager to jump on it. 

Credit card balances have risen steadily since the pandemic. The latest Federal Reserve report shows that Americans owe a cumulative $1.14 trillion in credit card debt, with average household balances at $7,951. 

With credit card annual percentage rates at historic highs, forgiveness programs may seem like a smart way out of debt. But experts say this would be a mistake.

As credit card debt increases, so does the opportunity for scammers to target you. When you find a flier in your stack of snail mail or an email in your inbox that promises to eradicate your debt, the flood of relief is understandable. But many of these companies are offering something they can’t possibly deliver.

How to tell if a debt relief offer is a scam

There are legitimate credit card debt relief companies out there, but they don’t offer any services you can’t do on your own. If a company’s promises seem too good to be true, they usually are. Here are 10 warning signs the company you’re looking into may not have your best interests at heart.

🚩 You’re asked to pay money upfront

“There are plenty of bad actors out there who try to prey on those with credit card debt,” said Jason Steele, a credit card expert and CNET expert review board member. “Asking for a lot of money upfront is a huge red flag.”

A reputable credit card counseling organization will not charge you in advance for help you haven’t received and will offer guidance even if you can’t afford fees or contributions.

🚩 The word ‘forgiveness’ comes up

When most people see the term “loan forgiveness,” they interpret it to mean that the debt was canceled. Leslie Tayne, a debt relief attorney and founder of Tayne Law Group, said you rarely can get 100% of your debt forgiven.

Companies often use terms like “forgiveness” to capture attention and get you to sign up. These companies are often debt consolidation or debt settlement companies soliciting you based on certain criteria they’ve researched. In other words, they know how compelling this terminology can be to someone in debt — they’re counting on it.

🚩 The company reaches out to you first

While some reputable credit counseling organizations might solicit potential customers through the mail or other forms of outreach, it’s not typical. Experts say you should be skeptical of any debt relief companies reaching out to you by text messages, email or mail.

🚩 The company isn’t interested in your debt — just your payment info

A reputable debt counseling company will ask you questions about your debt, like how you accumulated it and will want to understand your finances better. A company that just cares about getting your money will skip these questions and focus on getting your Social Security number or bank account information instead. Any debt company that gets right down to payment details likely doesn’t have your best interests at heart.

“A good credit counselor is going to look at the whole picture,” Steele said. If the company isn’t doing that, you should reconsider.

🚩 It tells you to stop paying your credit cards

If the company asks you to stop making credit card payments, watch out.

Unlike a nonprofit credit counseling agency or an attorney, a debt settlement company might encourage you to stop paying your bills entirely. If you do this, especially without having a conversation with the credit card company, you’ll almost certainly incur more fees and penalty charges than you currently owe. Your credit score will also plummet.

🚩 You’re pressured to make a decision

A legitimate credit counseling service won’t subject clients to any kind of sales pitch. When you hear phrases like “act now,” “limited-time offer,” or someone mentions a deadline by which you need to make a decision, that’s one sign of a scam.

“Anytime you’re having debt or financial challenges, nobody should be putting pressure on you, and you shouldn’t have to make a decision right away,” said Tayne.

🚩 No one asks about your financial goals

Everyone’s financial situation is different, and that’s equally true for people with credit card debt seeking solutions to minimize it. There’s no one-size-fits-all way to reduce or eliminate debt, and any organization that doesn’t ask questions about your current situation and financial goals is probably not trustworthy.

🚩 A company promises to make the situation go away

If a company says it can completely erase your debt, you can almost guarantee it’s a scam.

“I would not counsel anybody that they could receive complete forgiveness,” Tayne said. Some banks might offer forbearance, which could involve better repayment terms. Completely erasing your credit card debt without paying it off or pursuing a more drastic solution, such as bankruptcy, is not a realistic promise.

🚩 You find negative online reviews

Thanks to the internet, there’s a wealth of information available on just about every credit counseling service you might encounter — legitimate and otherwise. If you think a company is legitimate, do your homework. Look for ratings from reliable platforms like the Better Business Bureau. If you’re seeing multiple negative customer reviews or no reviews at all, you may want to steer clear.

🚩 You’re told about a ‘new’ government program for debt relief

When a program is backed by the government, you may be more likely to trust that it’s reputable. But any company telling you this is likely trying to trick you into giving them money.

“There is no government program for credit card debt forgiveness,” said Tayne. So, if part of the company’s sales pitch involves a “new” government program that promises to relieve your credit card debt, it’s almost certainly a scam.

Where to find reputable credit card help

Instead of sifting through credit card repair offers from companies that may just want your money, do your own research to find a reputable debt counseling company. Steele recommends using the National Foundation for Credit Counseling to connect with one or more certified agencies that can help you review your financial goals and your budget before creating an action plan for tackling your debt.

You can also review the FTC’s list of cases against companies accused of credit-related scams.

The editorial content on this page is based solely on objective, independent assessments by our writers and is not influenced by advertising or partnerships. It has not been provided or commissioned by any third party. However, we may receive compensation when you click on links to products or services offered by our partners.


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