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These days, many commercials show people walking happily off into the sunset on the beach because they were relieved of their credit related debt issues, after investing in free credit card consolidation. While legitimate debt consolidation companies exist, a large number of advertised services are scams that target unassuming individuals. You should be aware that there are numerous steps that you can take by yourself to resolve your credit card debt. However, in the event that you decide to pursue professional help, it is extremely important that you take steps to properly assess the company’s worth, scrutinize their payments plans, and undertake maximum due diligence before actually signing any sort of an agreement with the company. Here are certain measure you can take and things you can watch out for to avoid the trap:
Be Wary of Companies Proclaiming to Be Not-For-Profit
Most scam-based companies will portray themselves as non-profit entities, which is likely to be a false implication. Quite simply, debt consolidation companies are commercial entities, and exist to make money for their owners and shareholders. However, some non-profit debt consolidators may be genuine companies since a large number of these companies get commissions from your creditors to settle your debts, with the commission rate being directly correlated to the amount they can help settle. Do not blindly trust a company simply because they claim to be non-profit.
Get Multiple Quotes for Monthly Payments
Make sure that you get documented quotations from all companies you are considering. Most credit card debt consolidators work similarly and should arrive at roughly similar interest rates and monthly payments to be made to your creditors. The best way to avoid getting scammed is to discuss your particular situation with multiple credit card consolidation companies and get customized quotes from all these parties before proceeding further.
Get Consumer Advice
While sometimes difficult to sift through, the Internet can offer access to numerous forums where actual consumers share their experience with various credit card consolidators. A number of consumers report scam experiences so that new consumers are not stuck in the same trap. You can run a check on the companies you shortlist in these forums as a safeguard against being scammed.
Don’t Pay for Services Before They Are Provided
You should avoid any company that wants you to pre-pay for services such as credit card debt consolidation, or to enroll in credit consolidation counseling for debt management that require up front fees. You are likely to never hear from these companies once you make the payment. Companies are required by law to provide the services before requiring you to make any payments.
Be Wary of Companies Asking You to Not Contact Credit Bureaus
A number of fraudulent companies offering credit card debt consolidation ask you to not contact credit bureaus directly. You should know that contacting the credit bureaus directly is your right, and these companies are likely to be taking no action on your case.
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