Aliso Viejo, CA’s SDS West Corporation and Addison, TX’s Debt Relief USA, Inc. are under fire for using deceptive marketing practices, charging clients outrageous fees, and essentially doing nothing to help consumers financial situations or debt problems. SDS West has advertised their services to included assist with debt negotiations. However, another company, Nationwide Support Services are actually the ones handling the negotiations but clients have no knowledge of this fact. The company advertises that their services are much better than credit counseling agencies and promise to contact every debt to a substantially reduced sum. Enrolling in the program with SDS West, consumer are told to stop making payments to the credit card companies and instead make payments to the Nationwide Support Services account to use for negotiations. Consumers do not know that a large portion of this money will be paid toward the high fees, usually 15% of the total credit card debt. There is an additional monthly maintenance fee of $50 to use the service. This means for consumers that their monthly payments will take months before any of it will actually go towards the credit card debt. The major issue lies in the fact that consumers did not know these things.

Debt Relief USA is alleged to have promised that consumer credit card debt would be reduced by 40 to 60 percent, allowing consumers to be debt-free in less than 3 years. However, Debt Relief USA essentially did not live up to that promise on most customer accounts, causing consumers to leave the program before debts were negotiated and after high fees were paid for the service. Much like the issues with SDS West, Debt Relief USA also charged even more fees upon successful negotiation of the debt amount.

In both cases, deceptive practices further hurt consumers credit scores and their financial situation by failing to negotiate debt and charging excessive fees. Practices like this are getting more common among debt settlement companies who are in the business to get some cash for nothing. Experts recommend that consumers carefully review reports on the Better Business Bureau and research any debt settlement companies before signing on as a client. Some recommend that consumers use credit counseling services instead of debt settlement companies because the fees can be more reasonable and the money management assistance is based on the consumer’s actual financial situation.

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The answer is yes and there are many families facing this issue each day. I’m referring to individuals or families that are on the brink of financial disaster. There are millions of people that are right now standing on the slipper slope to financial ruin, living paycheck to paycheck, praying they face no emergencies and all the while making valiant attempts to remain current on their financial obligations. Unfortunately as life would have it some of these people will climb back up the slope and reach more stable ground and others need just one misstep and they will fall.

If you have significant credit card debt and are struggling to make the minimum payment each month it is time to take a hard look at your finances and get some help. Many people prefer not to accept the reality of their situation and continue struggling to keep creditors happy and in an attempt to maintain a good credit score. The fact remains if you have no plan on reducing your debt it is only a matter of time before you miss a payment and before you know it your credit score will plummet and you will still have to deal with paying off your debt.

There are many debt relief options available to you today, in fact companies helping people get out of debt are doing plenty of business right now. Unfortunately many people fail to seek help because they think they can do it on their own or they fear the negative effect debt reduction programs have on their credit score. People also fail to take into consideration the many factors that go into calculating your credit score, such as your utilization of available credit. It stands to reason that if you become pro-active in reducing your overall debt you will have a much easier time rebuilding your credit.

The fact remains that your credit score is vital to your financial future and if you truly wish to have a good score you must first get out from under your pile of debt before you can focus on maintaining a healthy score. Not only will your credit score recover you will be in a much better position to save money, invest in your future and build wealth.   Don’t let maintaining your credit score be a deterent if you feel you need help in getting out of debt.  The reality is this; if you are qualify and are considering a debt relief program your current financial situation is likely already having a negative effect on your credit score.

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Needless to say, I graduated college with thousands of dollars in credit card debt.  I also started my family a little earlier than expected- within a few months of graduating, so I needed to get serious about paying off my debt- and fast!  Here are some of the techniques I used to pay off credit card debt, and avoid the need for auto loans or other credit in the meantime:

• I stopped using the credit cards- completely.  I quit cold turkey!  I literally just stuffed them in an envelope and put them in my file cabinet.
• I called each of my credit card companies and negotiated lower interest rates.  I received 5% interest on each of the cards for a temporary period- which helped me make a huge dent in the size of the debt because more of my payments were going toward the balance and less was being eaten by the interest.
• I used the snowball method of repayment.  This means I paid the minimum balance on all of my credit cards except for the one with the lowest balance.  On that card, I paid as much as I could afford until it was paid off.  Then, I applied the money I was paying on that account to the next credit card payment until THAT one was paid off. Each time a card was paid off I would have more money to apply to the next account.
• I babied my car to make it last!  While my friends were running out and getting nicer (and more expensive) cars with loans, I was just maintaining my existing car – but without a monthly payment because I had already paid it off.

If you’re ready to get out from underneath credit card debt, you have to just make it your priority.  Most importantly- you’ve got to stop using the cards so you can pay them off.  If you continue to use them, even for small purchases, it will make it almost impossible to get caught up.

Getting out of credit card debt takes patience. The best thing to do is receive some credit counseling and try to get a handle on your finances. Don’t go through life with bad credit, get the help you need today.

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