Credit card debt is a common reason someone might need 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.
Of course, any solution to debt problems has limitations. For example, you can’t “max out” your credit cards and then file for bankruptcy. Trying to do this could be fraudulent. Likewise, you can’t settle debts shortly after you have made them.
Although most credit cards are unsecured debts, sometimes what looks like a credit card isn’t that at all. For example, retailer cards look like a credit cards. But instead, these accounts are actually installment contracts. So, yes, while you might have a card with a retail store. But your purchases could be collateral for this debt. If you bought high-ticket items such as electronics, furniture, or major appliances using a store account, the debt is probably an installment contract. It is important to understand this distinction because if you don’t repay this debt, the creditor can repossess the merchandise they sold you. Some examples of accounts that are installment contracts include:
- Home Depot and Lowes.
- Best Buy.
- Floor & Decor.
- Kay and Zales Jewelry.
- RC Willey