I really thought we had endured all of the games that the credit card industry play. I was wrong. They are at it again. Last Fall, we dealt with a series of interest rate increases, credit line decreases, minimum payment increases, and random changes of the payment due date. These were all attempts from the credit card companies to get more fees out of us, in anticipation of the changing laws dampening their business. Those laws took effect in February. Now, they are playing new games.
We have a signature loan debt with a company that also offers credit cards. The account statement this month showed a payment that was much larger than the "fixed" payment we have had for the past couple years. I called to inquire about what suddenly changed.
The first account assistant could not figure it out. He looked over our account and saw that the payments have always been on time. The interest rate had not changed. There were no additional fees. So, he transferred me to someone else.
The next assistant to get on the phone took a while looking through our account. She finally blamed the government. I actually laughed out loud at that response. She explained to me that the new laws require them to set payments to the extent that credit cards could be paid off in a "reasonable time," which she casually said was 8 years. I informed her that we were speaking of a loan, not a credit card, and the loan was specifically set up for 8 years, with a fixed interest rate and payment. She stumbled over her words, and tried to blame the government some more.
After she realized I was not going to accept her faulty information, she changed gears and informed me that the first assistant had actually transferred me to the "hardship" department. She said she would be willing to look and see if there was any way she could change the payment based on hardship. I was curious about what options were available, so I let her try.
We spent a few minutes going over details of our income and expenses. I shared that The Referee was going to be on furlough by the end of the week. She gasped at the amount we spend on medical expenses. She took the info and ran it across the system and came back with a slightly smaller payment, and a referral to a consumer credit counseling service.
That was an interesting response.
I let her transfer me to the credit counseling service rep, more out of curiosity. Since I am not sure how long we will have paychecks to pay our bills, I thought it would be good to know what the next step is in the process. I know of 1 friend who used a credit counseling service years ago, so I already had a bit of an idea of what they were about.
What I learned was that they have nothing to offer us.
When someone signs on with a credit counseling service, they go through an assessment of their budget with a financial adviser. The service then sets up a monthly payment that the consumer pays to the service, and the service distributes the payment to all the creditors. This service is for unsecured debt. The service also charges a fee, somewhere between $10-$50, depending on what state you are in. The service claims to talk to the creditors and get a decreased interest rate and payment, in an attempt to pay off the balances sooner. The consumer is encouraged to close up the credit cards and no longer use them. With this service, credit card debt is paid off in 3-5 years.
I explained to the rep that we had already shredded all of our credit cards. We are paying on them every month, in an attempt to pay them off. The payment schedule we are using will pay off our debts in less than the 3-5 years offered. (We are following Dave Ramsey's plan, which does just about the same thing, without the fee!)
I explained that we were talking about a hypothetical situation anyway, because if the paycheck goes away, there will be no money to make credit card payments. That is when the rep recommended that I call back to the internal hardship department of that credit card company. She shared with me that they are able to do much more for their customers, but tend to transfer them to consumer credit counseling as a way to brush them off and get someone else to deal with them. She assured me that the company has many other means for dealing with my debt and circumstances. I find that very interesting.
I have not pursued it anymore so far. Right now, we have the paychecks to cover the payments, so our accounts remain current. If that status changes, I will deal with it then.
We have a signature loan debt with a company that also offers credit cards. The account statement this month showed a payment that was much larger than the "fixed" payment we have had for the past couple years. I called to inquire about what suddenly changed.
The first account assistant could not figure it out. He looked over our account and saw that the payments have always been on time. The interest rate had not changed. There were no additional fees. So, he transferred me to someone else.
The next assistant to get on the phone took a while looking through our account. She finally blamed the government. I actually laughed out loud at that response. She explained to me that the new laws require them to set payments to the extent that credit cards could be paid off in a "reasonable time," which she casually said was 8 years. I informed her that we were speaking of a loan, not a credit card, and the loan was specifically set up for 8 years, with a fixed interest rate and payment. She stumbled over her words, and tried to blame the government some more.
After she realized I was not going to accept her faulty information, she changed gears and informed me that the first assistant had actually transferred me to the "hardship" department. She said she would be willing to look and see if there was any way she could change the payment based on hardship. I was curious about what options were available, so I let her try.
We spent a few minutes going over details of our income and expenses. I shared that The Referee was going to be on furlough by the end of the week. She gasped at the amount we spend on medical expenses. She took the info and ran it across the system and came back with a slightly smaller payment, and a referral to a consumer credit counseling service.
That was an interesting response.
I let her transfer me to the credit counseling service rep, more out of curiosity. Since I am not sure how long we will have paychecks to pay our bills, I thought it would be good to know what the next step is in the process. I know of 1 friend who used a credit counseling service years ago, so I already had a bit of an idea of what they were about.
What I learned was that they have nothing to offer us.
When someone signs on with a credit counseling service, they go through an assessment of their budget with a financial adviser. The service then sets up a monthly payment that the consumer pays to the service, and the service distributes the payment to all the creditors. This service is for unsecured debt. The service also charges a fee, somewhere between $10-$50, depending on what state you are in. The service claims to talk to the creditors and get a decreased interest rate and payment, in an attempt to pay off the balances sooner. The consumer is encouraged to close up the credit cards and no longer use them. With this service, credit card debt is paid off in 3-5 years.
I explained to the rep that we had already shredded all of our credit cards. We are paying on them every month, in an attempt to pay them off. The payment schedule we are using will pay off our debts in less than the 3-5 years offered. (We are following Dave Ramsey's plan, which does just about the same thing, without the fee!)
I explained that we were talking about a hypothetical situation anyway, because if the paycheck goes away, there will be no money to make credit card payments. That is when the rep recommended that I call back to the internal hardship department of that credit card company. She shared with me that they are able to do much more for their customers, but tend to transfer them to consumer credit counseling as a way to brush them off and get someone else to deal with them. She assured me that the company has many other means for dealing with my debt and circumstances. I find that very interesting.
I have not pursued it anymore so far. Right now, we have the paychecks to cover the payments, so our accounts remain current. If that status changes, I will deal with it then.
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