CHARLOTTE, N.C. — If you’ve been struggling to keep up with your credit card payments, or you’re just looking to build credit, some people will turn to credit-builder products.
But not all credit builders are built with good intentions.
A new study from WalletHub shows some credit-building services have emerged with questionable new tactics that threaten the integrity of the credit system.
WCNC Charlotte has some things to look out for so you’re not left asking where's the money?
WCNC Charlotte is always asking "where's the money?" If you need help, reach out to WCNC Charlotte by emailing money@wcnc.com.
WalletHub said these credit card builder products prey on people desperately working to fix their credit. They promise a customer something in exchange for money, but in most instances, those promises are left unfilled.
Christie Matherne, an editor at WalletHub, said, after studying 22 credit builder products, they found many operating under a shady premise.
"Generally they do things like, for instance, they'll give you a sort of debit card to use instead of a credit line, but then they report a credit line to credit bureaus, so it that's kind of gaming the system a little bit," Matherne said.
Matherne said, many times, people with no credit or bad credit assume they can't make a monthly payment, so they are tempted to utilize these credit-building sites to skip over late payments.
She said while there are some legitimate sites, the best and easiest way to build credit is to open a credit card and make payments on time.
If you pay your bill off every month, you will not pay a dime if it's a card with no annual fee. However, if you are struggling with those monthly payments, Matherne suggests getting a secured credit card.
"Basically what it is is the credit line, but it's secured with a deposit that you pay upfront," Matherne said. "So your credit line is equal to your deposit. but you can still get negative information with these cards, you can miss a payment, and it's reported as a late payment, you know, so it does build your credit."
Matherne said if you opt for a credit-building product, there are some things you need to look out for. Be cautious of any product that asks you to pay an exorbitant fee or claims they don’t report any negative information to credit bureaus.
WCNC Charlotte's Where's The Money series is all about leveling the playing field in the Carolinas by helping others and breaking down barriers. WCNC Charlotte doesn't want our viewers to be taken advantage of, so we’re here to help. Watch previous stories where we ask the question “Where’s the Money” in the YouTube playlist below and subscribe to get updated when new videos are uploaded.