The need for credit card debt relief
Debt relief from credit card debt is something we see in our personal insolvency cases all the time. We read in the newspaper and hear in the media about the high level of Canadian debt. Credit cards, after mortgages, are one of the main types of debt being carried.
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People always ask us how to reduce debt and the first way is to have realistic expectations about what you can afford. The next way, is not to fall for advertisements that seem too good to be true and require you to input your credit card information for a “free trial”.
I’m sure you’ve heard the expression, “There’s no such thing as a free lunch”; that may be true for free trials as well. These so called free trials most commonly incur what we call “grey charges”. Grey charges are big business and responsible for big debt. According to Aite Group, there are 233 million grey charges a year, amounting to $14.3-billion (U.S.).
What are grey charges?
- Free-to-paid are the most common grey charges. You sign up for a free trial period (typically a magazine or online service subscription) after which it becomes a paid subscription if you forget to cancel by a certain deadline. How many people forget to cancel by the deadline? There are over 115 million free-to-paid transactions a year, adding up to over $6 billion, according to Aite Group.
- Phantoms are extra products and services added onto another transaction.
- Zombies are subscription fees continually billed to you even after cancellation.
We are seeing more grey charges creeping into credit card debt requiring overall debt relief.
Why are they called grey charges?
They’re called grey charges because although they’re legal, they are morally in a grey area.
These grey charges can go on year after year and all the while you’re accumulating debt. “Nine out of 10 people don’t check their credit card charges carefully,” says Mick Weinstein, vice-president of software company BillGuard. “And even if they do, it’s too time-consuming to dispute those charges. So most people simply let them go.”
So the first avenue to obtain debt relief, is to look at all your credit card charges closely and take the time to dispute the ones that do not look authorized.
Four ways to catch grey charges
Don’t be on auto-pilot when it comes to your finances. Take action against grey charges with these 4 tips.
- Check your credit card statements carefully each and every month. These may seem like small charges, but they can add up and hurt you.
- Don’t sign up for free trials. Remember, there’s always a hook. So if you wouldn’t pay monthly for it, don’t sign up. There is no such thing as a free lunch.
- If you do sign up for a subscription, make sure you read the fine print. You need to understand exactly what your financial obligation is.
- Check for phantoms. You may be paying for features you don’t want or need.
Serious debt requires serious professional help
Debt is serious business that requires the help of serious professionals. If you’re struggling with debt and are in need of debt relief, contact the Ira Smith Team as soon as possible. We’re a full service insolvency and financial restructuring practice serving companies and individuals throughout the Greater Toronto Area (GTA) facing financial crisis or bankruptcy that need a plan for Starting Over, Starting Now. We have helped many individuals obtain the debt relief they so desparately require. Take the first step towards financial freedom today.
