The Truth in the Fine Print
Indebted consumers are constantly looking for solutions to their financial problems. The current financial crisis has given birth to a new type of financial repair company that preys on consumer’s ignorance. Consumers can protect themselves.
It is essential to check the fine print. A 0% interest rate may jump to 19% after the first six months. A store card offering 15% off with the first purchase may be carrying a prohibitive 29% plus interest rate. A doorstep loan, or a debt consolidation loan, my reduce the monthly payments, but dramatically increase the interest payment, forcing the consumer to endure a high debt load for months longer than they should
The consumer should consider the fees next. What fees are attached? Is there an annual fee? Is there a sign-up fee? Many sales representatives do not reveal fees until the credit papers are ready to sign. Asking the sales representative about additional fees, and then watching to see if any are added, is a great way to test a company’s ethics.
The last thing watch dog groups tell consumers to check is the penalties. Take time to make sure you understand all the penalties. No one assumes that something will happen, but it is better to ask questions. One important question to ask is whether there is an early payout fee. Many consumers are alarmed to learn the high early payout levies. A consumer who needs a debt consolidation loan can find themselves with a debt several hundreds of pounds higher, just because they try to find some debt relief.
The government is educating consumers on alternative methods of financing to handle debt problems. The a proposed launch date is set for early 2007.