The Financial Problems Caused by Timeshares

Timeshare owners deal with so much unnecessary stress. For starters, they can’t use the property when they want to. Timeshare scheduling is incredibly complex, and individuals are often stuck visiting the place at the same time every year. Moreover, the people who work at timeshare resorts can be manipulative. As terrible as those drawbacks are, the most significant disadvantage to owning a shared vacation spot is what it does to people’s finances. Here is a list of the biggest financial problems caused by timeshares that everyone should know.

Opening Credit Cards for You

In a previous post, we talked about the drawbacks of letting a timeshare resort open a credit card for someone. If a person gives a salesperson their credit card and driver’s license, they can open accounts in someone’s name without their knowledge. Surprise credit cards can ruin a person’s financial stability and inhibit their ability to be successful in the future. Moreover, if a resort employee opens multiple lines of credit in someone’s name, the account holder is still responsible for making those payments. That’s why timeshare owners should steer clear of handing over their plastic to anyone who works at these establishments.

Using a Credit Card for the Down Payment

Speaking of credit cards, some timeshare employees convince people to use credit cards for the down payment. Putting that much on a credit card at one time is never a wise idea because the person’s credit score will drop quickly. It’ll also be more difficult for that person to pay off a large amount of money, and their interest rates may skyrocket. Those who use a credit card for a timeshare down payments find it challenging to dig themselves out of the hole. As a result, many timeshares go into foreclosure, which wreaks further havoc on someone’s financial situation.

Those Pesky Maintenance Fees

Moving away from credit card talk, another thing that makes timeshares an awful financial investment are maintenance fees. Believe it or not, regular upkeep is usually not included in the original price of a timeshare. Instead, owners must pay a certain amount every year to ensure their place stays in good shape. As if that weren’t bad enough, these fees can rise every year. This means people will likely have to pay more money than what they budgeted for.

Maintenance fees are just another example of how timeshare companies try to drain people dry. Individuals shouldn’t forget that timeshares are jointly-owned vacation property, meaning owners can be held responsible for damages caused by someone else. Any owner who wants out of their contract should call Preferred Cancellation Services immediately. We’re one of the best timeshare cancellation companies out there, and our goal is to get people out of an awful situation before they suffer financial ruin.

Taxes and Special Assessments

No one likes paying taxes, but almost everyone agrees it’s their civic duty. However, tax season is even more unbearable for those who own a timeshare. For starters, the tax rates can be pretty steep, and who wants to pay for something they rarely get to use? As previously mentioned, timeshare scheduling is complicated. Owners can’t call the resort and pop in for a first whenever they want. Under a fixed schedule contract, people have to visit the property the same week of every year. Floating schedule agreements let individuals choose their trip days, but popular dates fill up fast. So, it really is first come, first serve.

Timeshare resort companies can subject owners to special assessments. Sadly, this means they can charge people for miscellaneous things at any time. Timeshare contracts are often very vague, meaning that there’s a lot of important details within the fine print. Owners should read over this agreement carefully and watch out for terms like special assessments, so they aren’t unexpectedly charged at a moment’s notice.

Interest Rates and Perpetuity

Another financial problem caused by timeshares is perpetuity. Unfortunately, timeshares contracts don’t become null and void upon a person’s death. As a result, the owner’s next of kin can be responsible for payments on the property. Not only could this affect a person financially, but the persistent hounding from a resort could impact their psyche as well. These kinds of companies are relentless, and they won’t stop making phone calls until they get what they’re owed.

One thing that loved ones may also have to deal with if they inherit a timeshare is skyrocketing interest rates. Some people take out a loan to afford the down payment instead of putting it all on a credit card. While this may seem like a good idea, in theory, the interest rates associated with these loans are significant. Furthermore, they may increase as time goes on, which means that someone can pay more money for their timeshare every year. Anyone who wants to avoid increasing costs should look into canceling their contracts immediately. The sooner a person gets out, the better.

There’s truly no advantage to signing a timeshare agreement. Aside from the tricky scheduling and manipulative salespeople, the contracts can also put people in financial ruin. When someone runs out of money, they could get desperate and apply for a loan that puts them further in debt. Another thing that may happen is that they foreclose on the property. Not much else hurts a credit score more than a foreclosure. Foreclosures show banks that a person isn’t financially responsible and that they can’t be trusted with additional funds in the future.

All of this financial stress can have a severe impact on a person’s mental health, too. Anyone who feels too overwhelmed by their current situation should reach out for help. After all, no relationship should be jeopardized because of a horrible timeshare agreement. Instead, individuals must put their well-being first and try their hardest to get out of an awful situation. That’s why timeshare owners should research experienced timeshare cancellation companies near them so that experts can help them see the light at the end of the tunnel. No matter how bad things seem, timeshare owners should always fight to get their lives back.