“Debt Wise” program from Equifax is Debt Stupid, for $14.95!

Equifax rolled out a new product recently: “Debt Wise.”

Shame on Equifax! This is a flawed program for which Equifax will charge $14.95 per month.

Here’s how it works, and why it’s a bad deal:

Debt Wise pulls all the debts from your Equifax credit file, and the program algorithm stacks the debt in order of size, from smallest to largest, and totaling the minimum monthly payment required on each.

Let’s say, for example, that your minimum monthly debt payments total $1000. You make a commitment to pay an extra amount that you choose – say, $30 per month – until you’re debt free. That extra $30 goes to the top of the stack every month, while the rest of the stack gets their required minimums, until the top debt gets retired.

Then, you continue paying $1030 every month until every debt is retired, in stack order.

It’s based on the “Snowball” strategy; you can find FREE Snowball calculators on the web, which WILL get you out of debt faster than paying the minimum each month, but it’s NOT the FASTEST strategy.

To SAVE THE MOST MONEY and ELIMINATE DEBT FASTEST, you want to retire your debts not in order of size, of course, but in order of highest to lowest APR (Annual Percentage Rate, your Interest expense)! APR tells you how expensive the loan is.

MoneyU includes a Debt Elimination Calculator that sorts on APR, and you can experiment with different accelerator amounts, until you see the outcome that you LOVE. And you don’t have to pay a monthly fee for it, either.

People who are carrying too much debt (and who isn’t?) should not be signing up for recurring monthly fees!

Don’t give Equifax $15 a month for a second-rate strategy.

Apply $15 every month to your highest APR debt and retire THAT debt first!

You’ll save ALOT more in interest expense and time, than with the Snowball method!

Why would Equifax do this? Because their valued customers aren’t the consumers, they’re the lenders who pay Equifax for your credit score.

And lenders don’t want you to get out of debt too fast.

This is a guest post by Katherine Griffin, President of Griffin Enterprises and Creator of MoneyU.com: an online course in Personal Finance for young adults.