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Credit Card Debt Archives

Options for customers when credit card companies increase rates

Pennsylvania residents may be concerned about the recently announced interest rate increases for American Express cardholders. While it is legal for the company to raise their rates, there are certain guidelines that credit card issuers must follow. The CARD Act, which was signed in 2009, changed the way credit card companies can do business and gave consumers several protections.

4 strategies for reducing credit card debt

Buying on credit has become the norm for Pennsylvanians. Nationally, the average person holds over $2700 in credit card debt. Unfortunately, with interest rates ranging from 13 percent to 20 percent annually, items purchased on credit can end up costing up to three times their value.

Credit card debt and arbitration clauses

Many Pennsylvania residents who have credit cards are bound by agreements to enter into arbitration instead of being able to file lawsuits against their credit card companies. Although arbitration is touted as a less expensive and quicker method to resolve disputes than court litigation, these clauses generally favor the credit card companies while preventing consumers from being able to file class action suits.

Understanding how credit card interest is calculated

Using credit cards can create financial challenges especially if consumers do not watch their spending and do not understand how interest is calculated. Credit card users with consumer debt who experience unemployment, reduced income and increased expenses may face creditor harassment because of delinquent payments. Consumers in Pennsylvania and across the country who are making only minimum payments on a credit card to their credit card company could benefit from understanding how credit card interest is calculated.

Debt collectors may owe money to the people they harass

People in Pennsylvania who are dealing with unpaid obligations and are being harassed by bill collectors may be able to hold those collectors accountable for their actions. If debt collectors violate the Fair Debt Collection Practices Act, debtors have the right to sue them. Every infraction committed by a debt collector could result in a judge ordering the debt collector to pay a $1,000 statutory award to the plaintiff.

Unanticipated issues with shared credit cards in bankruptcy

Pennsylvania parents may find it prudent to provide for the emergency needs of a child going away to college by means of credit cards. However, it is important to recognize that the conditions of such a card could create problems for any party involved in its management or use. A bankruptcy on the part of one party, for example, could lead to collection action against another.

Protections offered by the FDCPA

Many people in Pennsylvania may be receiving calls from debt collection agencies if they have fallen behind on their payments. It might be beneficial for these individuals to know that they are protected under federal law. The Fair Debt Collection Practices Act, which is enforced by the Federal Trade Commission, limits the types of actions that a collector might take while pursuing an outstanding debt.

Statutes of limitations and credit card debt

For Pennsylvania debtors, the statute of limitations on unpaid credit card debt may come as a welcome relief. Statutes of limitations prevent debt collectors from filing civil lawsuits against a debtor beyond the time period set forth therein. Debtors should be aware, however, that the statute of limitations does not prevent the creditor from seeking to collect on the debt in other ways.

IRS wants taxes paid on cancelled or forgiven debt

Pennsylvania residents may be surprised to learn that the Internal Revenue Service considers forgiven or cancelled debt to be income. Consumers who reach agreements with creditors to lower the amount they owe are often surprised when they subsequently receive a cancellation of debt notice from the IRS. The agency learns about the arrangement because creditors are required to notify them when an outstanding balance is reduced by $600 or more due to debt forgiveness or cancellation.

Statutes of limitations for credit card debt

In Pennsylvania, creditors wishing to sue a debtor for payment generally have four years after the debt becomes delinquent in which to do so. Although four years is the statute of limitations in Pennsylvania, a judge may sometimes rule that the debt is subject to the state laws where the credit card was issued from. For instance, debt on a Wells Fargo credit card might be subject to a six-year statute of limitations, as the card is issued out of South Dakota.

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