The Wall Street Journal recently reported that some credit card issuers are partnering with debt collection agencies to offer consumers a credit card, if they agree to repay old debts.
After several years, depending on the state, outstanding credit card debts pass the statute of limitations and consumers are no longer required to pay them. The damage to the consumer’s credit has already been done.
When one payment is made on an old debt, the statute of limitations clock is reset. Now the debtor is legally required to repay that debt as if he or she had just incurred it. When old debt is added to the card balance, interest begins to accrue immediately.
- Be wary of any credit offer requiring repayment of outstanding debt.
- Review any credit card application fine print carefully and know your rights.
- Ask questions before signing up for credit.
And, as always, be a smart consumer!