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Bankruptcy And Debts Blog 30 March 2008

30 March 2008

Credit Card Debt Relief and Card Credit Debt Relief

Posted by James Breen at 3/30/2008 11:36:00 AM

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Like credit counselors, debt-settlement firms generally collect a single monthly payment from clients. But rather than disbursing the money to credit-card companies to cover the borrowers' bills, they withhold it. The settlement firms then use the money as a bargaining chip in an attempt to negotiate a lump-sum payout with lenders. The booming business has caught the attention of prosecutors and regulators, who say such programs can leave consumers in worse financial shape. When banks ..read more.

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Credit card and even more so Store card interest are set at exorbitant rates for one reason alone, companies make their money from the consumer’s inability to settle their card balances. Credit card debt is unsecured, whereas other debt like your mortgage is secured (your home acts as security against your debt). With credit card debt, there is no backing security, which means that credit card debt is high risk for banks and hence the high interest rates