Credit Card Debt Collectors have new tricks.

As credit card delinquencies rise (up to 4.5% in most recent quarter), credit card companies have become much more aggressive in their efforts to get delinquent card holders to pay up, according to the Wall Street Journal. The first thing many are doing is stepping up their dunning efforts, making them sooner and more frequently. They are also using tricks to get around answering machines and cell phones. For example, one bank sends delinquent card holders a phone card with free calls built in that cannot be activated unless the card holder calls the bank where they will be pressured to step up their payments.

Some credit card companies are using software to check for any change in a cardholder’s status. For example, one software program will use data from a credit reporting agency to flag anyone whose ability to pay seems to have improved. Big brother is watching!

There are also some steps being taken which I think are positive for the cardholder. For example, one bank has set up a web site that allows cardholders to arrange their own payment plans which will hold off the nasty calls. But maybe the best thing they have done is to give credits to cardholders who agree to pay down or pay off their balances. Citibank does this with a matching program that adds money to every payment made under an agreed upon plan for pay down. They will give this to people whose outstanding balance is maxing out whether or not they are delinquent. Maximum amount awarded is $550.

If the bank has gone to debt collectors, you can stop them from contacting you with a cease and desist letter. And remember, credit card debt is NOT secured debt, which means that you can usually wipe it out (or cut it down to 10-15 cents on the dollar) in bankruptcy court.

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