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Ads for credit card help actually lead to debt settlement
By Angela Hawke on Mar 22nd, 2010
As some consumers seek desperately for ways to pay their bills, some may consider an option like debt settlement.
However, that choice may be fraught with difficulties. In a recent column for Wisconsin's Sheboygan Press, Ken King noted that some of these offers may actually make consumers worse off, including hurting their credit score.
King, executive director for the United Way's Family Service Association, recently got a letter from a consumer who saw an advertisement on television saying that the government has provided money to help bail people out of credit card debt. King said that nothing like that exists and that the ad is really for a debt settlement offer.
"The 'credit card bailout' ads are very careful not to say they are government programs," King said. "The ads only imply there is help."
King went on to say that the numbers advertised on these spots often lead to referral companies that pass a consumer on to a debt settlement service.
One danger in debt settlement is that the companies can have consumers stop paying their credit card debts and instead collect the fund to produce a lump sum to pay off lenders. Doing so can hurt a person's credit score.
Furthermore, officials in a number of states have warned that some of these companies may ask for upfront fees and then provide no services, which could put the person even further into financial trouble.
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