July 21st, 2009
HelpWithMyCredit.org – good for me or good for the banks?
The same financial institutions whose rising credit card interest rates and fees heap debt upon debt on cardholders are now extending an olive branch with HelpWithMyCredit.org. But can consumers trust this helping hand, or are consumers just fooling themselves with more of the credit card companies’ tricks of the trade?
The Good
A coalition of credit card Issuers and payments networks—Citigroup, Discover Financial Services, Capital One Financial, Bank of America, Visa, and Mastercard—launched HelpWithMyCredit.com in February as a resource to educate and assist consumers struggling with credit card debt.
The website is a collaborative effort by these companies to guide consumers to specialized customer care representatives within each of the Issuers, or introduce them to accredited credit counseling agencies. The goal is to get consumers in contact with the Issuers and talking directly to a representative about their specific credit issues so they can access information on how to best manage their current credit situation.
HelpWithMyCredit.org provides some worthy tools and rich content, including:
- A toll free number, (866)941-1030, connects you with operators who can provide you with information on how to contact your specific card Issuer and a credit counseling agency, depending on the consumer’s unique issues and questions.
- HelpWithMyCredit.org will pick up the tab of your first credit counseling visit at a participating credit agency.
- A credit card payment calculator helps consumers determines how much they need to pay each month or how many months it will take to pay off a credit balance.
- Advice for cardholders on tips for managing credit and how-to guides for reading your credit cards statements
The Bad and the Ugly
Though good for consumer financial literacy and all-around awareness of credit card management, the site has been called “self-serving” and “deceptive” by the media because the alliance of these financial institutions isn’t just to help you—it’s advantageous to them as well.
Bankruptcy causes the Issuers to have to charge off the entire credit balance of your cards; however, if they are able to get you into an internal program or a credit counseling program, it’s likely they will be able to recoup 40% or more of the outstanding balance.
Interestingly enough, some of the sponsored credit counseling agencies are not approved by the U.S Department of Justice Trustee due to lack of fulfilling credit counseling requirements for bankruptcy. Participating in a credit counseling program means the agency has control of the terms and conditions of your account and can place them outside the standard rules and regulations of the credit card industry, and thus continue debt collection at their discretion. Also, the credit counseling agencies are paid on a percentage basis of the payments they are able to procure from the consumer.
So with all the money the coalition and its affiliates stand to gain from cooperative consumers, its questionable whose interests are in mind.
HelpWithMyCredit.org–A Final Verdict
For all the hype and the pleasantries of these Issuers uniting for the good of the consumer, it isn’t apparent yet just how good it actually is for the consumer. It could be a much-needed push those drowsing in debt to finally take the first step, or it could be a wolf in sheep’s clothing that preys on people’s debt problems to further entangle them with issuers and agencies.
According to compete.com, HelpWithMyCredit.org only had just over 14,000 unique visitors and there are no numbers to tell how many of those visitors actually reduced their debt thanks to the coalition. It does advocate consumer financial literacy, but beware—the financial institutions backing the site have their own interests in mind beyond alleviating your debt.
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