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Q&A: Credit card debt
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June 4, 2001: 8:11 a.m. ET
Ways to eliminate your credit card debt, and the latest on Dodge Neon's recall
By Julie Vallese
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NEW YORK (CNNfn) - Are you concerned with your credit-card debt? Should you seek outside help to get rid of the debt? Does Ford Explorer's design makes it prone to rollover crashes when a tire fails? And what is the latest on the Dodge Neon's recall?
Consumer safety affects us all. Unfortunately, it can be tough to track down information on product recalls, crash tests and government warnings. CNNfn is here to help. Send us your questions at consumer@cnnfn.com and we'll do our best to get them answered. The Q&A appears weekly on this page.
Question: I'm a 25-year-old male who has recently gotten himself into a lot of credit card debt. School loans, rent and car payments are all starting to catch up to me.
Anyway, I've been looking for some help. I've found a couple places, but I don't know the difference between them. What's the difference between a place like Profina and all those NFCC/CCCS agencies?
Please help!
- Dave
Answer: Getting out of debt doesn't necessarily mean having to hire someone to help you. There are steps you can take to get yourself out of debt. All it takes is time and discipline. Don't think your phone call to your credit card company or bank asking to set up a payment plan is the first call of its kind. Many are willing to work with customers to set up a payment schedule to pay off the debt. They would much rather find a way to collect on the loan, although possibly at a slower pace, then not receive the full amount.
Before doing anything, you should assess your situation and see if there is something you can do to reduce your debt.
Develop a budget. Know how much money comes in to your home and how much goes out. Don't leave anything out. Enter in your fixed expenses, such as rent, car payment, electricity, groceries, anything you know must be paid first as a basic. Then list the extras, entertainment, eating out, the things you could do without or less often. This should help you figure out how much you can pay creditors on a monthly basis.
Contact your creditors. You should contact all of your creditors and let them know you are having financial difficulty. Let each know how much you can pay a month towards the debt and how long you anticipate the term will be. You may be able to pay "X" amount, they may want to receive "Y" amount, but chances are if you can't meet "Y" they'll take "X."
Then stick to the agreement and don't dip into any credit still available to you. If your situation has earned you a poor credit rating, that information will remain on your credit report for at least seven years. No matter what you see advertised or what anyone promises you, no one can erase bad accurate information from your credit report. Only time and a commitment to paying off debt can erase that information. A good repayment plan record is taken into account on your credit report.
If you are not disciplined enough to do this yourself, there are credit counseling services available. They are usually non-profit agencies that charge a nominal fee or are free and will set up a payment plan, provide educational materials or help you develop a budget. While you are trying to decide which company to use keep in mind any reputable credit counseling agency should be willing to send you information about the company and their services, free of charge, without asking you for anything more than your name and address. If they ask for more information about you that should raise a red flag.
In determining which agency is best for you the FTC suggests asking some simple questions. What services do you offer, what are your fees, will you help me with my current problem as well as future ones, what is the source of your funding, will there be a formal contract, how soon can you take the case, what are the qualifications of your counselors, who oversees the agency?
In determining the legitimacy of the payment program ask: How much debt do I need to have before I can use your services, how are my payments determined, how will I know if my creditors have received the money, do you provide status reports, do I have access to my accounts, what if I can't keep up with the payment plan, and how secure is the information provided to you?
Besides looking up agencies in the phone book, you may find some financial counseling programs at the local university, military base and credit union.
Question: On Monday, May 28th, CNN did a report regarding computer companies that will take old and used computers and their accessories, like monitors. I have two that I need to get rid of and I'm told that I can't put them in the trash. I have also found that the recycling companies in my neighborhood I live in Arlington, VA will not take old computers.
- Doris
Answer: According to a study that looked at the end of life electronic product recycling and reuse in the United States, almost 21 million personal computers became obsolete in 1998. Only 2.3 of those computers were recycled.
But not all computers need to be retired. They can be donated to schools, charities and non-profit organizations. Some companies and charitable groups refurbish old computers for resale. You may even be given a small cash sum for your computer to one of these types of groups.
If you don't think your computer is worth donating you can recycle it. Although the computer may not be worth much on the technology market, there are some components made of gold, silver or platinum that companies separate from wires and connectors for other uses.
To find out the names of companies that will recycle computers in your area log on to www.nsc.org. There you will find a table of all 50 states. Click on your state Virginia and a list will come up of companies you can contact in your area.
Question: Are Ford Explorers more prone to rollovers compared to other SUVs of similar physical dimensions, i.e., GMC, Chevy or Dodge? The focus on Ford and Firestone has made us sensitive to whether our car more dangerous that competitive models, or do all SUVs of the same dimensions have the same risk?
- David
Answer: Most vehicle rollovers occur when a driver runs off the road, strikes a curb, or "trips" on an obstacle. Because of the simple laws of physics, sport/utility vehicles (SUVs) in general are more prone to rollovers than passenger cars. Based on studies by the National Highways Traffic Safety Administration (NHTSA), taller, more narrow vehicles are more likely to rollover once they go off the road than lower wider vehicles.
This year NHTSA began testing and posting rollover resistance ratings for passenger vehicles, sports utility vehicles and pickup-trucks. The "star rating" ranks the risk of rollover by giving a vehicle one to five stars. One star has a higher risk of rollover, five stars a lower risk. It should be noted that a vehicle with a 5 star rating is still capable of rolling over, but the likelihood is less than 10 percent.
According to the government tests on the Ford Explorer, the 4x2 and the 4x4 both receive two stars. That means they have a risk of rollover of between 30 and 40 percent. Of the SUVs tested and rated by NHTSA two stars is pretty much the average for the vehicle class. There are some SUVs that earned 3 stars but none higher. Only the Chevrolet Blazer and GMC Jimmy 4x2 were given the lowest rating of one star.
To help reduce the risk of rollovers, NHTSA offers the following advice:
- Always wear your seat belt
- Avoid conditions that lead to loss of control
- Be careful on rural roads
- Avoid extreme panic-like steering
- Maintain tires properly
- Load vehicles properly
Question: What is the scoop on the Dodge Neon 2000-2001 recall that we heard about on CNN? The brake booster vac hose needs to be replaced since it is draining power from the brake system.
Answer: The National Highway Traffic Safety Administration (NHTSA) announced a recall of Dodge Neon's manufactured from July 1999 through March 2001. A problem with the presence of oil and heat in the brake booster vacuum hose can cause a loss of assistance in the power brakes and can cause the engine to idle at increased speeds.
A owner notification schedule has not been set by DaimlerChrysler (DCX: Research, Estimates) but should be in place shortly. Neon owners can take their vehicle to an authorized dealer for a free replacement of the brake booster vacuum hose. You should contact your local dealer to set up an appointment. If consumers do not receive the repairs in a timely manner they can call DaimlerChrysler at 1-800-843-1403.
Question: I read your column on identity theft; it was very interesting. But I have a question about my Social Security number. I set up a customer account at a video rental in the one-horse town in which I live. There I had to submit my SSN and credit card to start the account. The damage I perceive I could do to this firm is that do not return a couple of DVDs costing $20 apiece.
Could I rightfully have refused to submit my SSN, and still be entitled to setting up an account? Who can ask one for SSN, and when can one refuse to reveal it?
- Jon
Answer: Every American is required to have a Social Security number. The number is used for a variety of government services including tax purposes and benefit programs. You are required to provide your social security number when applying for a job or any of the above services.
The federal government is governed by the Privacy Act therefore, they do not share your social security number except with other government agencies for tax reasons or the administration of public benefits. Even if your next of kin, spouse or legal guardian calls the agency for your number to help with any personal business the agency will not give out your number. The private sector is not governed by that same law.
In the case of applying for a credit card, loan or in your case a video rental card there is nothing prohibiting companies from asking for your number. You do have the right to refuse to give that information. However, if you choose not to provide the number, a company can deny you service or their product. You will need to weigh which is more important to you, keeping your number private or being provided services.
Some privacy experts we spoke with said in a case like yours (a local business where the people probably know you) you might ask if another number such as your phone number or house number could be used for tracking. This, however, probably wouldn't work with a large corporation or bank. 
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