Common Consolidation Mistakes: Mistake 1
Stumble it!
With so many options available for unsecured credit card debt consolidation, and with so many companies competing for a slice of the lucrative debt consolidation pie, it comes as no surprise that many people make one of several all too common mistakes when consolidating their debt.
Whether you choose the wrong credit card consolidation option, or you simply choose the wrong company for help, these mistakes can prove to be very costly. This series of articles will examine some of the most common credit card consolidation mistakes to avoid when you get started on your way to getting out of debt.
In this article, we will look at common consolidation mistake number 1: Blatant Scams and Disreputable Companies. Other mistakes covered in this series include:
- Not Accounting for Fees and Other Expenses
- When Lower Interest Doesn’t Pay
- Risking Your Home for Unsecured Debt
- Saving Short Term, Losing Long Term
Avoid Rip Offs and Shady Companies
When people are struggling with debt, they tend to get desperate. Unfortunately, many shady companies are more than willing to prey on those in desperate need of help by making false promises. Instead, the consumers who fall for these deceptive practices usually winding up in even more debt.
The first and most important rule when you are searching for help in getting out of debt is this: If something sounds too good to be true, it probably is. Many of us want to believe that we do not have to legally repay our debts, or that a company can totally wipe out our debt for a tiny percentage of what we owe, but if these promises were true all of the banks and credit card companies would have long been out of business. It can be tempting, especially when you are struggling with mounting credit card bills, but resist the temptation for the easy way out: it is usually just a scam, and leads to an even harder road out of debt.
Not a Scam, but Still a Rip off!
Some people who choose a legitimate option for consolidation still find themselves in worsening situations as well. This happens quite often when a consumer seeks help from a disreputable or shady company. The company may have predatory terms, such as exorbitant and/or hidden fees, or the company may simply be too eager to land new clients, even when the service offered does not truly fit the client’s best interests.
How to Consolidate Your Credit Cards and Unsecured Debt and Avoid being Ripped Off
Whenever you are considering working with any company that will be impacting your finances, it is important to do your homework! Research the company’s background, and check with the Better Business Bureau to see if the company is a member. Still, being a member is not enough: check to see what kind of record the company has with the BBB! If a company is rather large, it may still have a few complaints, but be wary of any company that has too much negative feedback!
It is also a good idea to avoid any company that tries to pressure you into using their products or services. This does not automatically mean the company will rip you off, but a company using high pressure sales tactics probably does not have your best interest in mind. Nearly any for profit company will fall into this category. So what should you do?
The best approach is to find a knowledgeable, yet unbiased, source of information. Some non profit credit counselors may fall into this category, but certainly not all of them will. Try to find a knowledgeable and helpful credit counselor (or any other trusted and informed source) who does not seem to be “pushing” you in any one direction, but is instead helping you to explore all of your options and helping you come to your own decision.
After choosing your best consolidation option in this manner, you can begin researching which company will be the best fit for you. Be sure that any company you deal with explicitly spells out all fees and charges, and also tells you exactly how the product or service that you choose will work.
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