Sometimes not even the “pretty fine print” has the answers consumers are looking for.
The cost of getting out of debt.
CreditGuard of America promises to alleviate credit card debt by cutting payments in half and reducing or eliminating interest payments for anyone with more than $2,000 worth of debt. Its radio ad says that the service has helped half a million people and can help you, too, just call the phone number in the ad for free information —so what’s the catch?
TINA.org called to investigate further and found out that CreditGuard, despite claims of being a nonprofit, charges customers a fee up to $75. We asked for additional information on fees, but the phone representative wouldn’t tell us anything more until we provided a social security number. So we then looked at their website, creditguard.org and found out that in addition to the set up fee, it also charges customers monthly “voluntary” fees up to $55 (which the phone representative failed to mention).
Just because an organization claims to be nonprofit doesn’t guarantee its services are free, or even legitimate. In fact, some credit counseling organizations charge high fees they don’t readily disclose, including some disguised as “voluntary” contributions.
If you are struggling with credit card debt, the FTC provides information on ways to check into credit and debt consolidation and relief services. A state-by-state list by the U.S. Department of Justice of government-approved credit counseling agencies can be found here.
For more of TINA.org’s coverage of debt issues, click here.