People struggling with bad credit know how difficult it is to get approved for a new credit card. But what if you were given the chance to open a new credit card with the agreement that you’d pay off an old debt? Would you accept the offer?
In December 2011, the Wall Street Journal reported a credit card arrangement just like this. Consumers with bad credit were able to get a new credit card, but it required them to pay several hundred dollars per month toward an old debt. Is it worth it?
How Old Debts Become Duds
After a certain amount of time, creditors and collectors lose their power to pursue you for a delinquent debt. The statute of limitations, which determines how long you can be sued for a debt, is different for every state, but ranges from 3 to 15 years. In most cases, the statute of limitations on debt is six years or less. If a collector sues you for a debt you haven’t touched in several years, all you have to do is prove that the statute of limitations has passed and the case will probably be dismissed.
Then there’s the credit reporting time limit which dictates how long delinquent debts and other negative information can appear on your credit report. That time limit is seven years for most negative data and ten years for bankruptcy.
Making Old Debts Anew
Once the statute of limitations has run out and a debt has fallen off your credit report, debt collectors realize they have little hope of ever collecting a debt from you. But, accepting a new credit card attached to the old debt reinvigorates that debt. You’re on the hook again. If you fall delinquent on your payments a second time, the debt collector can sue you and report the delinquency on your credit report. But, on the bright side, if you make your payments on time and handle the debt responsibly this time around, you may qualify for a better credit card offer.
Getting New Credit Despite Your Bad Credit
Whether you feel morally obligated to pay back the debt or not, signing up for an offer like this isn’t the best way to get your credit back on track. There are other ways to get a credit card that don’t involve reaffirming your old obligations.
Even if you find it hard to get approved for regular credit card or retail credit cards, a secured credit card is usually the best option. Secured credit cards require you to make a security deposit to secure the credit limit. The Capital One Secured Mastercard has an offer that lets you pay $49 or $99 for a $200 credit limit, if you qualify. Worst-case scenario, you’ll have to come up with at least $200 to secure your credit limit. It’s not bad considering you might have to pay that amount or more monthly if you accepted a credit card deal from a debt collector.
Don’t let a debt collection credit card offer fool you. If you know you have bad credit and you haven’t been successful at getting your credit card applications approved, you should be suspicious of any credit card offers you receive. Read the fine print thoroughly, several times if necessary, and make sure you know what’s expected if you decide to accept the offer.
It’s done. Google has implemented “radical” new changes to the Google Privacy Policy which will affect anyone who has anything to do with Google while they’re logged onto the Internet, and that includes just about everybody who is logged onto the Internet. Yet, there doesn’t seem to be the massive outcry you would expect from the public, at least as compared with some of the privacy policy changes made by Facebook. Is it that everyone has become desensitized to this whole privacy issue, or is it because it has to do with Google and everyone already knows it knows everything we are doing? Maybe a little of both?