Credit Card Quick

Credit Card Debt Settlement Scams: The Danger Signs

Credit Card Debt

If your debts are overwhelming and you find yourself falling behind on monthly payments, then it may be time to get the help you need.

Because the recession has left many Americans out of work and unable to meet their monthly obligations, a wide variety of debt settlement companies have cropped up. The majority of these companies are reputable, but some are not. It’s a classic example of fraudulent individuals swooping in to take advantage of a situation; in this case it is a wide group of individuals who are struggling to pay their bills.

Debt settlement services are companies that provide a service to individuals in financial straits. The goal of a reputable debt settlement service is to negotiate deals with your creditors to repay your debt, usually for a fraction of your balance, without interest fees or other charges.

It is important to understand, however, that a debt settlement service may not be right for you, and it may be more advantageous to file bankruptcy. It is therefore essential that you speak with a lawyer regarding your choices and your rights, as each situation can be very different.

Debt settlement services may be a smart alternative for individuals that want to avoid bankruptcy, or for individuals that, under the new bankruptcy laws, may have difficulty filing for bankruptcy under Chapter 7.

Once you have talked with an attorney and have decided to pursue debt settlement, it is vital that you choose a reputable debt settlement company. Although it may be difficult to differentiate between a reputable company and a scam, the following warning signs should tip you off to a less-than-reputable company:

• The debt settlement company charges a huge, upfront fee for their services. In other words, avoid any company that demands a large, initial fee is typically not trustworthy, as federal and state regulators have busted many companies that take thousands of dollars from consumers, only to fall short on their promises of debt relief.
• The debt settlement company claims to repair your credit. It is important to understand that debt settlement, regardless of which company it is through, will significantly impact your credit score. A debt settlement on your credit report will damage your credit, so don’t let anyone tell you otherwise.

It is important to remember that a debt settlement company is NOT the same as non-profit, consumer credit agencies. Many consumers find that using a consumer credit counseling agency, or simply negotiating directly with their creditors, is often a better option than debt settlement companies.

Skimmer Credit Card Fraud on the Rise

Card Security

Did you know that a thief can be using a credit card in your name, with your account number, right now?

Don’t think you’re at risk? Think again.

Have you ever handed your card over to a waitress, store clerk or hotel staff member when making a credit card purchase? If you answered yes, then you are at risk of being a victim of credit card “skimming.”

A skimmer is a small, hand held device (often as small as a pager!) which enables a thief to immediately obtain your credit card information in just seconds.  The scenario usually plays out like this: the employee takes your card and leaves to run your credit card for your purchase. With just an extra swipe of your card into the skimmer, the thief now has your name and credit card information.

The thief then usually downloads this information onto a computer and uses it for a variety of fraudulent activities. Many thieves are able to duplicate counterfeit cards and then distribute them for use worldwide.

This problem is huge and getting bigger by the day. In fact, it is estimated that skimming costs consumers more than $1 billion each year.

There are a few things you can do prevent a skimmer from damaging your credit:

• Never let a clerk, waitress or other type of employee walk away with your credit card. Pay cash at restaurants and other venues where your credit card must leave your site.
• Keep a close eye on your credit card bill so that you can catch fraudulent activity before it gets out of hand and ruins your credit score.
• Immediately contact the credit card company in question if you notice any unauthorized charges on your credit card.
• Immediately contact the three, major credit reporting agencies – Equifax, Experian and TransUnion – if you suspect any fraudulent activity and ask them to put a fraud alert on your credit report.

It is important to remember that, as a consumer, you must remain on high alert when it comes to your credit. Stay informed, read your credit card statements carefully, and immediately contact the appropriate sources if you suspect any kind of fraudulent activity on your credit card.