If youre one of the many people struggling to rebuild your credit, chances are good that credit card offers have stopped flooding the mailbox. Lenders continue to be weary of subprime borrowers, having suffered big losses during the recent financial crisis. However, debt-collectors are appealing to riskier borrowers by offering them credit cards with a catch.
A recent Wall Street Journal article outlines the controversial partnership between debt collectors and banks. Banks allow debt collection agencies to use their license with MasterCard in exchange for fees and higher-than-average interest rates on the new cards. Basically, borrowers are offered these credit cards in exchange for the payment of old debts that have expired under the statute of limitations.
In some cases, the borrower is only obligated to pay a partial amount, while others are on the hook for the full amount. These partnerships are growing in popularity as debt collectors seek to recoup losses. However, federal authorities have scrutinized certain offers due to their deceptive nature. Sometimes, wording is unclear and misleading borrowers dont understand that by accepting the new credit card, they are circumventing the statute of limitations that protected them from having to repay the expired debt. This means that collection agencies have a renewed time frame to collect old debt.
For some borrowers, however, these cards are a welcome surprise. Consumers who made financial mistakes in the past but are now more responsible can receive a line of credit in exchange for paying off old debt. These people are given a second chance at establishing good credit.
Regardless of your credit status, you’ll benefit from the credit management and protection services of FreeScore. With the Power of 3, youll receive access to your three scores and reports from the major credit bureaus: TransUnion, Experian, and Equifax. Having this information will give you an idea of how far you are from achieving your goals. Youll also receive 24/7 credit monitoring and automatic alerts that notify you when suspicious activity has been detected on one of your accounts. This can help protect you from identity theft, which can be devastating to your credit scores. Dont let all of your hard work be ruined by a thief using your personal information. With services from FreeScore, youll have peace-of-mind protection and a better understanding of your credit. And that can make all the difference if youre trying to take control of your credit.
Similar Posts:
- What Is The Debt Fair Act?
- Getting Rid of Negative Collection Accounts From My Credit Report
- Know Your Credit Rating – Can You Get a Free Credit Score Rating Online
- 3 Ways to Receive Your Credit Report For Free
- Reasons Why Payday Loans in UK Carry High Interest Rates
no comment until now