Comments on: Credit card companies squeezing hard http://polizeros.com/2008/02/06/credit-card-companies-squeezing-hard/ Musings on politics: anti-war, global warming, peak oil and otherwise Sat, 06 Sep 2008 05:15:07 +0000 http://wordpress.org/?v=abc By: DJ http://polizeros.com/2008/02/06/credit-card-companies-squeezing-hard/#comment-148445 DJ Wed, 06 Feb 2008 16:27:21 +0000 http://polizeros.com/2008/02/06/credit-card-companies-squeezing-hard/#comment-148445 Credit card companies have always gone after the ones who pay a little-- they're more likely to pay than those who pay nothing. And for those who pay little or nothing, the creditor's goal is to force you into bankruptcy so they can write off the debt and get the tax credit. There's little worse for them than an old receivable on their books-- they want it collected or written off as quickly as possible. As to the increased minimum payments, that's actually a good thing: It used to be that card companies could set their minimums so low, no principle was paid down. One of my clients once had a Sears card, and we calculated that if she paid only her minimum payment, her balance would take 600 years to pay off! Talk about indentured servitude. For those in trouble, get familiar with the Fair Debt Collection Practices Act (search for it online). It says what collectors can and can't do under Federal Law-- and in my experience, collectors thrive on the knowledge that few people know the rules. Credit card companies have always gone after the ones who pay a little– they’re more likely to pay than those who pay nothing. And for those who pay little or nothing, the creditor’s goal is to force you into bankruptcy so they can write off the debt and get the tax credit. There’s little worse for them than an old receivable on their books– they want it collected or written off as quickly as possible.

As to the increased minimum payments, that’s actually a good thing: It used to be that card companies could set their minimums so low, no principle was paid down. One of my clients once had a Sears card, and we calculated that if she paid only her minimum payment, her balance would take 600 years to pay off! Talk about indentured servitude.

For those in trouble, get familiar with the Fair Debt Collection Practices Act (search for it online). It says what collectors can and can’t do under Federal Law– and in my experience, collectors thrive on the knowledge that few people know the rules.

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