I have trying pay off my credit cards for some time and tired of not paying them off. I looked into Clearpoint debt management but I’m worried.
I have good credit 740.
I have a total of 4 cards with most close to maxed out. Clearpoint says they can lower interest on cards by closing them all and have them pay credit card companys one automatic payment that gets withdrawn from my account every month, including their fee. (40/month).
One is Clearpoint a reputable company(not a scam)Two, will this affect my credit? Will they really be able to lower my interest rates?
It’s not the going with Clearpoint Credit Counseling Solutions that can lower your credit score but the closing of your accounts. That serves to kill the continued good credit you get from having open accounts with a long credit history.
For more on this see Why Enrolling in a Credit Counseling Program Can Hurt Your Credit Score.
If you need a credit counseling program, like Clearpoint then that is actually a different issue and you should be enrolling because you’ve run into trouble, not because you just want lower rates. In fact if Clearpoint was selling you on enrolling just to get lower interest rates, that would piss me off.
If you want to preserve your exceptional credit rating the two most logical ways to reduce your debt would be by using a free service like ReadyForZero.com or an unsecured debt consolidation loan, as long as the interest rate was lower. For debt consolidation loans I recommend LendingClub.com and if you decide to go that route, let me know what your loan number is and I’ll help to fund it, like I do for my other site readers.
If the Clearpoint program takes five years, as an example, your fee for this approach would be $40*60 or $2,400. It’s not free. So you have that cost, and also the potential cost of future credit if your credit score slips.
As you can see there is more to this and other costs than just lower interest rates.
The bigger issue though is why your cards are maxed out. If you have great credit because you’ve been making payments on time but you are maxed out because you’ve been using credit to make ends meet, then we have a bigger issues.
If you’ve been using the cards to get by and then the cards are closed, you won’t be able to fall back on them anymore. The reality is that you can be current on your bills but have a negative cash flow each month that is hidden with the card use.
Maybe you can share more with me in the comments about what has been going on and what the ClearPoint sales pitch was about lowering your interest rates.
Please post your responses and follow-up messages to me on this in the comments section below.
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