COLORADO SPRINGS — With inflation and many families gathering together for the first time in years, financial experts at WalletHub say by the end of 2022 credit card debt alone increased by $110 billion. Consumer protection experts say you’ll want to be careful who you trust to help manage that debt going forward.
WalletHub financial experts say in 2023 193 million Americans will be using at least one credit card. A.J. Alexander is one of those people leaning on their credit card a little harder in recent months.
”Definitely things are a lot more expensive I’ll say that. Definitely spending a lot more on things so probably yes spending more on the card than usual for sure,” he said. “But I know a lot of people that are relying on them. I’ve been there before too.”
After an expensive month of gift giving, many bills are now arriving and it’ll be time to pay up. In addition to the calls from debt collectors, many people may also hear from someone else looking to cash in.
”Taking advantage of vulnerable people who may have spent too much and are having trouble making ends meet,” warns Adah Rodriguez of the Better Business Bureau of Southern Colorado
She says get out of debt fast and credit repair sales pitches will come in the form of robocalls, text messages, and even by letter. It could lead to some major blunders for consumers facing financial challenges.
”Typically those are the scams that have either purchased your information or found your information and they know you’re maybe in a tough spot and then they solicit you. Typically they’re going give you a good deal that can’t be turned down and use high pressure sales tactics,” said Rodriguez.
In the worst cases the Federal Trade Commissions says cash-strapped consumers are charged a large up-front fee by a company that falsely claims they can remove negative information from their credit report. Also, there are often promises to help settle or lower their debts. In most cases the fraudsters takes the money and doesn’t provide any service at all.
For consumers who suffer this damage, it’s usually not a quick fix.
”Choosing the wrong company can be an impact on your life for years. You are absolutely right. So, it’s really important to do your research,” said Rodriguez.
STEPS TO REPAIRING CREDIT INCLUDE...
Contacting creditors and negotiating for a lower rate or lower monthly payments.
Consolidating debts into a single loan payment
Getting help from a certified credit counselor who can also help you budget, help you come up with a payment plan and really teach you money management skills
The best debt settlement companies are transparent and are accredited by industry watchdogs like the American Fair Credit Council (AFCC). You can search for and find legitimate debt relief companies on its website.
In these cases it’s also important to know your rights as a consumer.
The FTC has taken companies to court who have violated this Telemarketing Sales Rule updated in 2010:
“It prohibits for-profit companies that sell these services over the telephone from charging a fee before they actually settle or reduce a consumer's debt.”
It also prohibits misrepresentations and requires that they disclose key information that consumers need in evaluating these services.
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