Is Memphis Associates a Scam or Legit?
Memphis Associates can’t help you with your high debt ratios. Memphis Associates is under review by Crixeo, the popular news and reviews site, for being part of a long-running debt scam. According to Crixeo journalist, Ed Miles:
“The story is the same. They lure you in by sending you direct mail with a “personalized invitation code” and a low 3%-4% interest rate to consolidate your high-interest credit card debt. You will be directed to MemphisAssociates com or myMemphisAssociates com. More than likely you will not qualify for one of their credit card consolidation loans and they will try and flip you into a more expensive debt settlement product.”
Ed Miles, crixeo.com
Recently, Memphis Associates, was profiled by Crixeo. Apparently, it is part of the same collection of web sites involved in the debt consolidation scam.
Many businesses offer discounts and rewards to their consumers if they apply for a certain credit card. From cashback to airline miles that you can use anywhere, there may be a lot of incentive for you. But before you make your decision, there are a few things you should know.
For starters, applying for a new credit card could ding your credit score. If you’re already struggling to stay on top of your bills, especially if you’re carrying debt on other credit card, you’re better off not applying. At the end of the day, the new credit card is just one more bill that you have to pay and one more due date that you could forget. If availing a few discounts were your primary motives for opening a new credit card, you’re better off not applying at all.
Before you go through with your application for the credit card, here are 7 questions you should ask yourself.
1. Are You Good at Paying Your Balances in Full and on Time?
Most people carry a balance on their credit cards every month. If you’re not good at paying off your debt, the high-interest rates will easily outstrip the value of any discounts or rewards you hope to avail. Not only is it important to pay the debt in full, but you also have to pay it on time. If you’re habitually late and have trouble with multiple due dates, then it’s simply not a good idea to apply for another credit card. It could easily overwhelm you and throw your finances completely off track. Debt consolidation to lower your interest rate may be a viable option.
2. Are You Good at Sticking to Your budget?
For many Americans, credit cards, especially ones that promise rewards, can lead to increased overspending. Before applying for a new credit card, make sure there’s enough money in your savings or checking account to cover the cost of whatever it is you want to buy before the interest payments start kicking in.
As a general rule of thumb, if you rely heavily on credit to make ends meet, this is a sign that you simply don’t have enough disposable income to cover the monthly expenses of the new card.
More importantly, if you know you’ll easily give in to overspending, it’s better to skip the new card and pay using cash instead.
3. Do You Plan on Applying for a Loan in Near Future?
Applying for a new credit card often requires a hard pull on your credit card. This could knock off your credit score by a few points (in some cases it could be a five-point drop). The drop may last for 12 months down the road. If you plan on applying for a mortgage or car loan soon, you’ll want to protect every point you can. However, if the credit card issuer only requires a soft pull on your credit report, you won’t have to worry about your credit score. The best way to confirm this is to get in touch with the issuer.
If you’re actively trying to improve your score or are barely in the good range or above, it may be a bad time to apply for the new credit card. Wait until your score has improved and you have enough buffer points in case the hard inquiry brings your score down by a few points.
Bonus point: You can remove hard inquiries on your credit report if you didn’t approve them. You have the right as a consumer to dispute unfair negative items.
4. Does it Have an Anti-Fraud Policy?
Ask the customer representative how the issuer handles unauthorized purchases. Federal laws limit the unauthorized use of credit cards to $50. However, it should be noted that many credit card companies have a $0 fraud liability. So make sure you know all there is to know about the issuer’s anti-fraud policies. The last thing you want is to cover the expenses on a payment you never authorized.
5. What’s the Regular APR
In order to keep up with payments on the new card, you’ll have to learn its terms. One of the most important bit of information you should know is the card’s annual interest rate. Don’t take the introductory rate at face value. While credit card relief may offer a 0% interest rate, it could rise sharply once the introductory period is over, and you’ll end up getting yourself into a financial heap of trouble later on.
Before you sign on the dotted line, find out when the introductory APR date expires and what the regular rates will be. This means reading the credit card’s terms and conditions, or simply calling the company for the information.
6. Are There any Annual Fees?
Many credit cards have an annual fee that is charged for the benefits that come with unpaid credit card debt. These annual fees range from $25 to $500 and could mean some serious financial setback for you. Make sure you check upon on the terms and conditions before signing p. In some cases you may be able to avoid the annual fees by asking for a fee waiver.
7. What is Your Credit Utilization Ratio?
Your credit utilization ratio makes up 30% of your credit score. A utilization ratio below 30% will have almost no impact on your credit score. But if you’re hovering above 30% or nearly use up all your available credit in the month, then it will ding your credit score (even if you fully pay off your balance on time).
If you’re above 30%, you might want to go ahead with a new credit card as long as you don’t use it. This should increase your aggregate ratio.
Wrapping Up: Weigh All Your Options Before Opening a New Credit Card
Never rush these decisions. First, take the time to truly reflect on the main reasons for opening the credit card. Then, do your research on the appropriate card for your particular financial situation, spending habits, and goals. More importantly, never apply without knowing the full story about the credit cards.