You may have seen or heard advertisements about a ?credit card bailout? that is designed to help individuals with problematic credit card debt get some relief. These ads seem to be popping up all over and they must be successful because more and more of them are showing up.
But here is a newsflash for you. There is NO Credit Card Bailout. Not from the President, the Congress, the Banks, The Credit Card Issuers, Santa Claus or the Easter Bunny. Not from Bill Gates or any other Bazillionairre. Not from anyone, anywhere, any place, any time.
No Credit Card Bailout. None. Nada. Zilch.
These ads are for debt settlement programs, which typically end up costing you a small fortune with no guarantee or even a slight certainty that they will even work.
What the debt settlement companies typically do is to get you to stop making your payments. BTW, this is exceptionally bad for your credit score; you think it was in decline before? Look at it after you haven?t made any payments at all for a while! You are instructed to put the money that you would have paid towards the debt into a savings account because you will need it later.
Then after some months they get in contact with your lender and see if they can negotiate a settlement, a significantly reduced settlement. Often that works. You are able to settle the debt for less than you originally owed.
But it probably is not the best solution if you want to keep your credit decent. The strategy may completely backfire and you?ll end up much worse off than you were before because your credit score has suffered and you now owe late fees, attorney fees, junk fees, deadbeat fees, fees fees, and mega-interest compounded as much as they possibly can (which they probably really can’t but you’ll still have too much interest to pay no matter because you stopped paying completely) on top of what you already owed before you got involved in this crazy, “credit card bailout” scheme.
Not to mention that you have to pay the debt settlement company thousands of dollars upfront (well, maybe not thousands but any money you pay to them for their ?service? is probably not well spent).
So don?t fall for the gimmick. There is NO Credit Card bailout. For you or anybody else.
For more info and another post on the subject see Credit Card Bailout Does Not Exist.