Credit card debt is a common reason why people seek legal help with their debts. Credit cards are typically high-interest debt. They are an easy-to-use, easy-to-pay financial product. At first, the minimum payments are affordable. But once someone becomes accustomed to using them, paying them off can be nearly impossible. In addition, using credit cards can be addicting. You can purchase what you want when you want it. At first, the cost is small…until suddenly, an introductory rate expires, and your minimum payment explodes.
Credit cards are convenient. They make your life easier. With a credit card on file, you don’t have to worry about having your power, phone, water, or other utilities turned off. You don’t need to wait until payday to buy groceries or pay a necessary unexpected expense.
You can eliminate credit card debts either through bankruptcy or debt settlement. However, both solutions have limitations as to when you can do this. For example, you can’t “max out” your credit cards and then go bankrupt. Trying to do this is fraudulent. Likewise, you can’t settle credit card debts when you recently used the cards.
Although most credit cards are unsecured debts, sometimes a credit card isn’t actually a credit card. For example, some retail cards look like credit cards but are installment contracts instead. Yes, you have a card you use at the retail or online location. But when you make a retail purchase, the things you buy can be security for the debt, especially if you bought high-ticket items such as electronics, furniture, furnishings, or major appliances. As a result, if you don’t repay this debt, the creditor has the legal right to repossess the merchandise you purchased. Some examples of these hybrid exceptions include:
Home Depot and Lowes.
Floor & Decor.
Kay and Zales Jewelry.