Credit card debt: Difference between revisions
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==Political Activities== |
==Political Activities== |
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Some credit card companies made [[lobbying|lobbying efforts]] at the federal level to change American [[bankruptcy law]] [http://www.jsonline.com/bym/news/jan05/288766.asp 2]. Recently it was reported that Americans are paying off credit card debt more frequently, and this was attributed in part to the bankruptcy legislation supported by the companies [http://www.slate.com/id/2117224/ 3]. |
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==See Also== |
==See Also== |
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Revision as of 02:21, 13 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.
Bankruptcy Concerns
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 another deal to the consumers they feel have been pushed to the brink of bankruptcy 1. This deal consists of reduced APRs, removal of past late fees and penalty charges, and reaging the accounts so that the credit agencies see them as late accounts.
Political Activities
Some credit card companies made lobbying efforts at the federal level to change American bankruptcy law 2. Recently it was reported that Americans are paying off credit card debt more frequently, and this was attributed in part to the bankruptcy legislation supported by the companies 3.