Genesis Credit Card - False Financial Solution or Second Chance
May 6th, 2008 | By Rob | Category: credit card debt, interest rate
The Christian Science Monitor has an article today about a second chance for subprime borrowers to establish good credit through debt collection company Genesis Financial Solutions credit card that provides normal interest rates on new debt and zero interest on old credit card debt.
This is an interesting manner of debt consolidation for credit card borrowers that have destroyed their credit. It provides (a) a chance to repair credit history through on time payment reports; (b) a credit card; and (c) avoidance of the feeling that one has shirked their debts. And it does so at normal credit card rates on new debt and zero interest on bad debts.
The problem - as I see it and which I am curious to see how Genesis handles it - is that normally a creditor will no longer be able to collect a bad debt after a certain amount of time has passed (the statute of limitations period). Some consumers may use Genesis to repay debts that they technically do not need to - and at a point in time where it would be financially smarter to wait until the debts roll off your credit report (for a certain set of inquiries they will always be visible…). By agreeing to repay the debt to Genesis, cardholders reaffirm the debt and extend the time period upon which they are required to pay or be sued.
If one absolutely must have a credit card, or is near the beginning of their credit problems, it may be a good idea. But if one is six years into their bad credit - as the person profiled was - that’s another story!
Is this new debt collection company practice a deceptive scam or a good idea? You decide!
