Little Known Problems Associated With Care One Credit Counseling
By Stephanie Robins on March 18, 2010, 6:04 am Posted in Economy NewsIn today’s economy many consumers are looking to third party companies like Care One Credit Counseling to help them manage their debt. However, debt managing is not all this company advertises and not all of their promises turn out to be true.
Just Another Agency
Care One Credit Counseling and a consumer have one big thing in common, neither the company nor the consumer can make creditors do anything and here is where the first problem begins. Care One offers their service as if they are able to do something that consumers cannot do themselves; this is false. Care One does not have any priority, rights or power over creditors and really all they do is make phone calls and fill out applications just like a consumer would. They cannot guarantee lower debt; all they can hope for are lower interest rates, repayment plans and maybe late fee waivers.
Total Debt
Here is the second problem, they claim to lower your debt but in reality all they may accomplish is lower monthly payments through obtaining a lower interest rate from the creditor. So yes, your monthly payment may have decreased but your debt is still the same. We cannot mistake debt consolidation and money management with debt forgiveness. Without the debt being paid off Care One cannot possibly lower any total debt amounts. In almost every case exept of course bankrupcty, money owed must be repayed no matter what.
Nothing Is Free
In the end, the lower interest rate might just even out with Care One’s start up fee and monthly fees. It is not a non-profit organization but rather a business and so it is ran like one. Be prepared to pay Care One’s services and remember, that is money you could be using toward other bills.
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- New Tips To Debt Consolidation And Not Badly Damaging Your Credit Score
- In Bill Consolidation Programs Will Late And Over The Limit Fees Be Erased?
- Little Known Tips On How A Consumer Credit Counseling Center Can Help You
- Little Known Steps On How To Pay Off Credit Card Debt
Actually, I am in credit card debt and it is my responsibility to pay it back. I didn’t sign up with Care One to knock off what I rightfully owe- but there is a settlement program if that is what you would like to do. Care One knocked all my APRs to 6%, something I have tried to do myself and was always told “you do not qualify at this time”. Care One charges me $34/month, but I will have paid off $17,000 in 5yrs and 9months rather than 17yrs with the interest I was paying. It is estimated that when I pay this debt off, I will pay $8000 in interest as opposed to $17,000 in interest. So the $34/month doesn’t sound too bad if you ask me. I can also increase my monthly payments to get it paid quicker. Care One has been a life saver for me as I drown in my debt from being stupid when I was a teen.
Care One does not charge a start-up fee, nor does Care One magically fix everything. You are in a team with Care One- meaning you have to be active on your side as well, like checking your balances and making sure payments are posted (Care One can not legally ask the credit companies for your info, including statements and balances). They are a tool and I have had no issues so far.
I’d actually recommend reading the message boards before signing up as debt management programs are not for everyone.
I signed up with CareOne about 2-3 years ago and did have to pay a start-up fee. I chose their plan that negotiates lower interest rates and no fees. My monthly fee was $53 on around $20,000. and am now in a financial mess over it. I did watch my statements and follow their plan as outlined. I did not monitor my credit report monthly, however which was the worst mistake I could have made. Although CareOne was making payments, they were not making payments that satisfied the contract terms between myself, the credit card companies, and CareOne as agreed upon, therefore those accounts all went 30, 60, 90, 120 days deliquent then to collections. I have settled with a couple of those creditors after cancelling with CareOne (I cancelled before I knew about the deliquencies related to their innapropriate accessing of my bank aacount). The creditors I settled with have told me they are very familiar with CareOne and have told me that it is one of the worst things you can do for your credit. A bank lending officer told me my credit would have been better off if I had filed bankruptcy. Now, one account that CareOne should have had paid off long before my cancellation is in pre-litigation and I have been able to, with the help of a co-borrower, obtain a small personal loan from the bank to pay everything off to keep my wages from being garnished and my accounts frozen. I have made multiple attempts to contact CareOne regarding these issues, but they seem to no longer have any record of me having been a client.
If this had happened only to me, I would not be as concerned about the company but 3 other people I work with are in the same situation. If I had it to do over, I would not have chosen this company. Be wary.
I spent a fortune in late fees and charges, since Care One does NOTHING to follow up with the companies you owe. NONE of the 6 companies I added to the program accepted anything Care One suggested, and ALL RAISED interest rates, since I was cancelling, and using a 3rd party. I had to pay them (and all of their fees) off on my own, while paying 50 dollars a month to Care One. I lost $10,800 by participating in this program. Better to do it yourself.
Care one has been paying my bills as promised. However, in instances where you have a GOOD card and NO problems– you should not include them.
All of your cards will be canceled. They claim it’s “inactive” but no. Canceled. My cards with 10 years worth of credit history gone. Just like that. I can reapply for a new card with the same company for a higher APR than I previously had. Now that I’m in a debt management program, I’m a terrible person in their eyes.
I’ve never missed a payment. However, I lost my job and used a variety of cards over a period of time. I was getting frustrated trying to make payments and thought Consolidation was the answer. $30 monthly for a service I needed. Fine. But loosing my card and damaging my credit… I’m really upset about this.
Care One simply references the contract I signed (but don’t have because it was signed digitally and over the phone)… and then they mention the letters they send to creditors as a proposal (which they won’t share with me.. even though it apparently allows them to cancel my account).
Overall.. Do it yourself.
Being lazy causes a variety of issues. God forbid you plan to make a big purchase that requires a good credit score. If you’re really that bad… File for bankruptcy instead.
Now I feel stupid. That’s clareed it up for me
Hey, that post leaves me feeling fooilsh. Kudos to you!
I am considering using CareOne but I have some reservations. Any suggestions would be appreciated.