In the July 2009 issue of Kiplinger’s Personal Finance, there is an article entitled The New Rules of Credit Cards.Â This article sheds light on the new credit card regulations passed in May, along with sharing stories of individuals who have had their credit lines slashed or their interest rates hiked on them without much warning.Â According to their reader poll, 30% of credit card customers have had their rates raised (I’m with you, unfortunately) and 19% of those polled have had their credit limits cut.Â The good news from the poll is that only 13% of those polled had higher balances today than the same time last year.Â I guess saving and frugal living really are catching on!
In a sidebar of this article, a website that is sponsored by major lenders and card companies is highlighted.Â The site (www.helpwithmycredit.org) is touted as a place to go for those who need help with their payments or are having trouble due to penalties or fees.Â Being the skeptic that I am, I decided to see how much this site really benefits and how much comes off like a way for these businesses to get their money “by any means necessary”.
A visit to the site itself shows promise.Â A highlighted link encourages the consumer to call their credit issuer directly as the FIRST STEP.Â This is a good call.Â If you are having trouble with payments or want to negotiate your interest rate, a conversation with the bank is a great starting point.Â If you do not have the first idea what to say to the institution when you call them, Ramit Sethi of I Will Teach you to be Rich has a great section in his book (same name as the blog) that contains scripts to help you get what you want from banks and credit unions.
Contents of the Site:
Help me with my Credit actually gives solid and useful advice for paying debt and managing credit.Â There are also resources for credit card features, how to understand your credit score and how to read your monthly statement.Â All of these links lead the consumer to actual help sources that are self-guided and encourage consumers to pay off their debt responsibly.Â After all, what would these companies like more than to get the money they are owed, plus interest?
Issues I Have:
Because Help me with my Credit is provided to us so graciously by Visa, Mastercard and major card issuers, I refuse to believe that out of the goodness of their hearts they decided to band together to educate their customers and help them with their debt problems.Â (I’m such a cynic.)
They are currently losing money hand over fist due to customer delinquencies and bankruptcies, so a well-crafted alliance only makes sense.
Enter, the credit counseling services.
The major card issuers have partnered with a number of Credit Counseling Services to assist customers who are in “over their heads” in credit card debt.Â I’m guessing that the idea behind this unholy union is to keep customers from falling too far behind and reaching bankruptcy, thus ensuring their continued collections.
I do not endorse this website and it’s aims.Â I believe it is little more than an attempt for the participating companies to get what they are owed from debtors.Â As I researched this piece, I found that I am not the only one.Â Steve Rhode, A.K.A. “get out of debt guy” wrote about helpwithmycredit.org, stating:
I cringed when I read the site, for me, it is a strong and open
reinforcement that the relationship today between credit counseling
groups and credit card companies, is self-serving at best and truly
deceptive at worse.
Regardless of your opinion of what this service actually offers, with the “bad”, there is actually some good information here, especially for those who are inexperienced with credit.Â As always, your commentary is more than welcome, so do not hesitate to leave a comment.