The pitch goes something like this:
“Mr. Smith, Here at XYZ collections our goal is to find a solution to your current debt owed that will work with you current financial situation. We have a solution that we are willing to offer you today that will make all parties involved happy. Our offer that is on the table for the next 30 days is to transfer your current balance over to a new credit card with a fixed 0% interest rate for the life of the debt.
The best part is that you will be making a payment that you can afford and being a new line of credit it will help rebuild your credit score as you payoff you current debt!”
Now here is the catch:
In the fine print terms for the new credit card offer they have the right to sue the party to acquire the balance. Since the debt has been transferred to the new card the debt is no longer beyond the statue of limitations and is fair game for litigation. Not only does the card holder get a possible judgment and punishment (wage garnishment, liens, or foreclosure); they now have 2 bad marks on their credit report.
The moral of the story:
The first thing to do is avoid getting into debt! Pay cash and be very hesitant when it comes to financing anything. In today’s society it is virtually impossible to live without some credit. Make sure that you take the time to educate yourself on how to properly build, maintain, and use your credit. There are many resources out there; especially with the internet at your fingertips.
If you do find yourself falling behind or you can see that it might happen; get help! There are many good companies out there that can guide you on what your options are.
Don’t take the first piece of advice out there (including this article); debt is never a “one size fits all problem”.
There are many good companies and there are just as many bad ones. Educate yourself on what the differences are between debt consolidations vs. debt management vs. debt settlement.
Banks and Collectors Have a New Twist on the Old Bait & Switch Tactic - To learn more about this author, visit Eric Pinola's Website.
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Offering free stuff as a marketing tactic is an accepted practice in most industries.
