Borrow Responsibly

Here you will learn about six of the most common practices used by the financial industry to lure in unsuspecting customers. These ploys all have one thing in common: massive fees and penalties for you, enormous income stream for the companies.

Predatory Auto Loans

Auto loan lenders also use the practice of offering zero or low interest rates for a short introductory period and then raising the rates significantly after that. Customers order extras on an auto which is included in the contract price, but then the car is delivered with no extras installed. Hidden fees and inflated interest rates are common practice.

Misleading Credit Cards and Questionable Practices

Many credit card lenders will offer no-interest or very low interest rates for a short period of time with a new account. Once that time period expires, your interest rate jumps dramatically. Remember that lenders don’t want you to pay off your balance. Interest and penalty fees earn them billions of dollars in annual revenue.

Unfair Bank Overdraft Fees

The average overdraft fee charged by banks today is $35. With almost everyone using debit cards instead of cash to pay for purchases, it’s no surprise that banks have manipulated the system to charge customers with as many overdraft fees as possible. They do this by posting the debit amounts from high to low, rather than chronologically. This results in billions of dollars of income annually for the banks.

Debt Relief Rip-Offs

The ads are everywhere. Debt relief companies offer to cut your credit card debt in half, stop harassing phone calls, and protect you from wage garnishment. It sounds too good to be true, especially to someone desperately trying to solve their debt problems. These companies almost never deliver on their promises and charge exorbitant fees for supposedly helping you.

Ugly Payday Loan Debt Traps

It’s hard to imagine but there are companies who want nothing more than to make your already shaky financial situation even worse. People who are having financial difficulties are usually stressed and desperate. These companies prey on that desperation. Banks offer low interest credit cards, credit card lenders offer balance transfer options, cash advance loan companies offer immediate funds. All of these are designed to make them money and put you, the consumer, in even more debt.

Shady Mortgage Lenders

Everyone has heard the horror stories about subprime mortgages and foreclosures. Mortgage companies approved people for loans with little or no documentation and questionable credit histories. After 3-5 years of low monthly payments due to lower interest rates, these mortgage holders suddenly were faced with considerably higher interest rates and ballooning monthly payments. Thus began the foreclosure crisis.

All of these companies thrive on the desperation and lack of knowledge of consumers about their financial rights and options. By learning to manage your money, borrowing and saving wisely, and knowing your legal rights, you will be better able to avoid these common pitfalls and protect yourself from sinking deeper into debt.

Learning to Navigate Today's Financial Troubled Waters

The housing market crash, Wall Street bailout, continuing high unemployment, and rising fuel and food prices have all contributed to very unsettling times for the average American consumer.

This prolonged recession, the worst since the Great Depression, has had devastating effects on every segment of society. While many people associate debt problems with low or middle-income households, this recession has touched people from all walks of life and all income levels.

Vast numbers of homeowners have lost some or all of the equity in their homes. A great many now owe more than their home is worth. Foreclosures are continuing on an unprecedented scale.

Americans, who previously used their credit cards for one-time big ticket items, now use them for everyday purchases, such as food, gasoline, clothing, and medical expenses. Credit card balances are becoming unmanageable and many customers are falling behind on their payments.

To add to this troubling picture, mortgage companies and credit card lenders are aggressively attaching penalty fees, higher interest rates, and other fees to already overwhelmed consumers.

The good news is there are things you can do to protect yourself from unscrupulous lenders, learn to become a responsible borrower, and improve your financial situation. It takes a little time and effort on your part, but the rewards can be huge.

Always Borrow Responsibly.