Does Your Bank Really Want To Help You?by Tim Manni
Just yesterday we heard that complaints over rising credit-card rates and fees have grown so onerous that a federal committee has launch a probe in order to investigate lending practices at federally-supported institutions.
Today we hear that banks are more than willing to help struggling credit card customers, even going as far as forgiving a portion of their balance.
Which message are we supposed to believe?
HSH has always advised customers who are struggling to make payments to first contact their lender to make them aware of the situation. Contacting your lender early could help you save a lot of money, as well as preserve your credit, in the long run.
HelpWithMyCredit.org is a new site designed to help struggling credit-card customers get back on track. The site is sponsored by some of the nation’s top credit lenders like Bank of America, Citi, and Capital One. Yet, we’ve read a couple articles today that warn sites like these don’t tell customers the whole story:
But [lawyer Robert S.] Green, whose firm has multiple class-action lawsuits pending against banks, warns that the “HelpWithMyCredit.org” Web site lacks important educational information.
“People should know this is slanted from the bank’s point of view,” he says.
Investment adviser and financial blogger Mike “Mish” Shedlock warned his readers that banks are usually interested in helping themselves first and their customers second:
Rule to live by: Whenever banks appear to be offering help, the odds are overwhelming that they are really offering to help themselves to your pocket book.
To be fair, I am quite certain some people benefit from these programs. However, when that happens, it’s best to consider it an accidental byproduct of banks doing what is in their best interest, not yours.
“This website is an industry response to help prevent losses,” said HSH Vice President Keith Gumbinger. Their website can help banks engage customers in trouble before they get into deeper debt or consider responding to third-party resources who charge the lenders in order to help recover their customers’ losses, explained Gumbinger.
Green suggests finding a less biased educational credit card resource like Consumer-Action.org.