Credit card debt: Difference between revisions
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'''Credit card debt''' is an example of unsecured [[debt]]. |
'''Credit card debt''' is an example of unsecured [[debt]]. It results when a customer of a credit card company does not pay back the company. It is the interest on this debt that enables the companies to make the profits. The results of not paying this debt on time are that the company will charge a late payment penalty and report the late payment to credit rating agencies. |
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# Charge you a late payment penalty |
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# Report the late payment to the credit rating agencies. |
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Sometimes the late fees and high [[annual percentage rate]]s (APRs) are too much for consumers to handle. In such cases the only couple of options left for the consumer are to use "Skip a Payment" companies such as NextMonthOnline.com or declare [[bankrupt|bankruptcy]]. Credit card companies are naturally wary of consumers declaring bankruptcy, as doing so forces |
Sometimes the late fees and high [[annual percentage rate]]s (APRs) are too much for consumers to handle. In such cases the only couple of options left for the consumer are to use "Skip a Payment" companies such as NextMonthOnline.com or declare [[bankrupt|bankruptcy]]. Credit card companies are naturally wary of consumers declaring bankruptcy, as doing so forces forgiveness of debt, thus losing any potential income from the debtor. |
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Hence the credit card companies usually are willing to offer a [http://www.debtconsolidationcare.com/creditors/ better deal to the consumers] if they feel that they have pushed the consumer to the brink of bankruptcy. This |
Hence the credit card companies usually are willing to offer a [http://www.debtconsolidationcare.com/creditors/ better deal to the consumers] if they feel that they have pushed the consumer to the brink of bankruptcy. This "better deal" consists of reduced APR, removal of past late fees and penalty charges, and reaging the accounts so that the credit agencies see them as late accounts. |
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# Reduced APR |
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# Removal of past late fees and penalty charges. |
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# Reaging the accounts so that the credit agencies see them as late accounts. |
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[[Category:Credit cards]] |
[[Category:Credit cards]] |
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Revision as of 22:54, 12 December 2005
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Credit card debt is an example of unsecured debt. It results when a customer of a credit card company does not pay back the company. It is the interest on this debt that enables the companies to make the profits. The results of not paying this debt on time are that the company will charge a late payment penalty and report the late payment to credit rating agencies.
Sometimes the late fees and high annual percentage rates (APRs) are too much for consumers to handle. In such cases the only couple of options left for the consumer are to use "Skip a Payment" companies such as NextMonthOnline.com or declare bankruptcy. Credit card companies are naturally wary of consumers declaring bankruptcy, as doing so forces forgiveness of debt, thus losing any potential income from the debtor.
Hence the credit card companies usually are willing to offer a better deal to the consumers if they feel that they have pushed the consumer to the brink of bankruptcy. This "better deal" consists of reduced APR, removal of past late fees and penalty charges, and reaging the accounts so that the credit agencies see them as late accounts.
The companies also have launched political attempts to make it very difficult for consumers to file for bankruptcy with their lobbying effort in the congress.