"Weight Watchers for Debt." That's how Scott Crawford, the CEO of DebtGoal describes the company's DIY model of getting out of debt in a phone interview with WalletPop. The service automates one of the toughest parts of getting out of debt -- figuring out a payment plan that is realistic. Tuesday at Finovate in San Francisco, the company announced a new tool for crowdsourced credit card rate negotiation.
Like Weight Watchers, DebtGoal focuses on providing consumers with the tools they need to get themselves out of debt by changing their behavior. "It's all about taking all this complexity and all this manual math" explains Crawford, "and making this as simple and easy as possible."
Unlike the nuclear option -- Debt Settlement -- DebtGoal is an online solution that puts the control and responsibility on you instead of a company that needs to be watched over.
SmartPay is a payment plan that adapts to lapses and overspending, thanks to links to your online accounts, and provides you with a target out of debt date. I really like that there is a set get out of debt date to help you work toward a goal, but one that also dynamically adjusts your payments and payoff date based on new spending. This helps us link new purchases to debt, and helps us to not quit the first time we falter.
According to Scott, a user with credit card debt can get out of debt in three to four years instead of 14 to 20, and will pay roughly half as much in interest compared to just paying the monthly minimum. So far, DebtGoal's SmartPay plan is helping manage and pay down more than $1 billion in debt, according to the company. DebtGoal costs $14.95 a month, and there is a seven-day free trial for the version which hooks into your accounts and continually updates.
Another really interesting tool that was announced by DebtGoal is NegotiateMyRate.com. This website uses crowdsourced responses and results to make it easier for you to call up your credit card company and get a lower rate. Say you have a Citi Card and want a lower rate. Instead of calling several times and getting bounced around from CSR to CSR, NegotiateMyRate will let you see how others got ahold of Citi, how they were able to get a lower rate and how big of an interest rate reduction they could get.
NegotiateMyRate.com is a free service from DebtGoal and offers consumers an upper-hand in negotiating a lower credit card rate, which is one of the first steps toward paying off your debt.
When it comes to managing your debt, I like the information provided by the DebtGoal website, and the use of an expiration date for your debt. It will depend on your current situation whether the $180 annual membership in the SmartPay plan is the right fit for your financial situation. It is certainly a better deal than traditional debt settlement in my opinion and the NegotiateMyRate tool already looks like a great tool for getting a lower interest rate and beginning a journey to get out of debt.
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