Watch Out for What's Coming in the Mail -- Persels & Associates Warn That Banks Are Marketing Credit Card Offers to Subprime Consumers

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Persels & Associates is a national law firm working with consumers to help them gain freedom from debt.

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Our clients have worked really hard to gain financial freedom. We want them to have access to credit – but the right kind of credit. The kind that comes with a low interest rate and no joining fee.

Watch out for what’s coming in the mail. Persels & Associates warns consumers that credit card offers are on the rise again!

After a dramatic pullback in 2009, where the credit market was very tight, credit card issuers have regained their footing and have begun to make more credit offers, reports Synovate Mail Monitor.

During the last part of 2009, US households received 398.5 million credit card offers, a 46% increase from the 272.5 million offers received during third quarter of 2009. However, volumes are still fairly low when compared to 668.1 million offers mailed during the same time in 2008.

Why the increase in credit offers? Lenders are once again targeting the subprime and risky lender. Persels & Associates wants consumers to take a hard look at what kind of offers are out there?

Research shows that there is an increase of direct mail marketing to the subprime consumers – consumers with poor credit. These offers come with slick packaging and allow borrowers to choose their own design and pay by dates but buyers beware of the fine print. A personalized card with a puppy or dandelion on the front can’t disguise the 26% interest rate or the $99 membership fee charged right off the bat. That means before you even buy your first purchase you’re paying 26% interest on a $99 membership fee. Without being careful that balance will skyrocket up and your card will be maxed out on interest payments for the original $99.

How do these lenders find their consumers? Industry experts say the mailbox is still the most popular way for issuers to reach consumers, despite recent response rates as low as 0.6 percent. According to the direct mail researchers -- mail is still the No. 1 method for acquiring new credit card consumers.

So what should consumers do?

1.     Read the Fine Print – the devil is in the details and often just taking a moment to read the fine print can enlighten consumers on what sort of pact with the devil they’re making. A 12% fixed rate is a good rate according to creditcards.com. Creditcards.com lists comparative rates and industry averages. A rate of 26%, what lenders offer those with subprime credit, is not good.

2.     Stop the Mailings - The Direct Marketing Association estimates that listing with their mail preference service will stop 75% of all national mailings. They process 50,000 requests a month and requests are kept active for five years. If you fill out the post office change of address form, the DMA will track the new address (you'll get a few months of mailings to the new address before they catch up to you). It can take up to six months for your request to be fully processed. You can also opt-out online, but they charge $5. The best way is to fill out their online form, then mail them a printout.

Hold the Phone: The major credit agencies all sell aggregate credit information any bidder. Direct mail and credit companies generate mail based on demographics including zip code, income band and credit payment patterns. Stopping this is easy, you just need your address, former address within two years, and social security number. One call does it all for agencies Equifax, Trans Union, Experian and Innovis. Dial 1-888-5 OPT OUT (or 1-888-567-8688) 24 hours a day.

Check the box – Whenever you fill out a form, entry, or buy something online – CHECK THE BOX that says you do not want your information sold to other companies.

Remember the Feeling of Freedom – American consumers have short memories. Take a moment, before you fill out that offer and remember how good it feels to be debt free. Ask yourself if you really want to get back in the cycle of credit card debt. Are those harassing phone calls and sleepless nights really worth it?

“Our clients have worked really hard to gain financial freedom,” said Joe Cosentini, Director of Operations for Persels & Associates. “We want them to have access to credit – but the right kind of credit. The kind that comes with a low interest rate and no joining fee.”

About Persels & Associates
Persels & Associates, LLC, and its entities are pioneers in the field of offering "unbundled" legal services to individuals who cannot afford traditional legal services. As Americans credit debt rose, Persels & Associates bridged the "gap" between consumers and their debtors. Today, Persels & Associates employs over 150 lawyers in the 50 states and has 25 central office staff attorneys with over 40,000 clients. For more information, please visit http://www.perselsandassociates.com.

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Karen McGagh
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