How Debt Gets to Collectors - Legal Consequences

How Debt Gets to Collectors - Legal Consequences When you become late on one credit card - your rates immediately jump up on ALL you credit cards. Including promotional zero-interest cards. And sometimes this goes retroactively back in time. Credit card companies explain that they can do this because you become a “high risk”. As of today (beginning of 2009) late fees and over-limit fees are by far the single biggest profit center for credit cards (more than $4 BILLION annually). Those fees have now gone as high as $43 on some credit cards, with the average between $35 & $39 by most major issuers. And unfortunately the lenders can legally do this - so pay close attention to your payment due dates. For more information visit www.101creditrepair.com As you miss payments - this gets reported to CRAs (Credit Reporting Agencies). And the lender will start contacting you (either directly, or via a contracted collection agency). If you miss the due dates on three payments, the lender will usually shut your card off, declare it in default and make demand for payment in full. Your rates and late payment penalties can quickly make your balance grow by 50% or more. If you don’t pay for 180 days - they will charge-off your account so that they can get tax benefits for it. They will also turn over to collections. Usually just sell for 3-4 pennies on a dollar. VERY IMPORTANT keep records of all letters you get (bills, collection letters), especially the proof of the charge off date or …

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