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From: News and Views | City
Beat |
Sunday, September 19, 1999
Getting Yourself Out of Trouble
 etting
out from under the thumb of credit card issuers is a real challenge.
But experts recommend a number of steps.
- Pay off your balance each month. If you have equity in your
house, get a low-interest home-equity loan and pay off your
high-interest cards. Unlike credit cards, other types of loans
generally don't raise rates unexpectedly.
- If you can't clear the balance, at least pay more than the
minimum payment. "It doesn't mean you have to get an extra job
working at McDonald's, but that's not a bad idea if you have a lot
of debt and you want to have a life," said Alan Franklin, a former
American Express executive who now runs the Philadelphia-based
American Credit Alliance, a credit counseling firm with offices in
New York and New Jersey.
- Be more suspicious of credit card companies and a more
aggressive advocate for yourself. Read all statements carefully
and call the issuers any time you think they have treated you
unfairly. Some cardholders find that when they call to ask that
fees be reversed, their bank will do so. Some have even been able
to get their interest rates lowered.
- Be skeptical of bonuses or other offers used to market credit
cards. For example, beware of cards that offer airline
frequent-flier miles. The actual value of those miles is often so
low that any offsetting costs (high interest, late fees and such)
totally negate its benefits.
- If you are eligible, consider credit cards issued by nonprofit
credit unions. Union members report low interest rates and no
surprises.
- If you're already in trouble, perhaps the best way out is to
consult a consumer credit counseling agency.
- Finally, you might consider avoiding credit cards altogether.
For some consumers, a lawsuit against the credit-card issuer is
often the only recourse.
For further information:
Consumer Credit Counseling Service of Southern New York (212)
922-9666.
American Credit Alliance (212) 292-4858.
Russ Baker
Special Report: Credit Quicksand Traps Consumers
(09/19/1999)
Special Report: Pols Take Credit for Bill (09/19/1999)
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