couldn't pay him back "yet." This call happened at least once a week.
My mom would scream at my dad, "I told you not to give him money!
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Again, I know this because I know the hedge funds that are the ultimate beneficiaries (not the banks, or the credit card companies).
They'll take it because it's like free money for them. They are pretty happy to collect on anything so they will probably say yes.
Credit card debt is NOT the same as friendship debt. A bank is usually a trillion dollar institution that charges you fees, interest payments, has lots of fine print, and makes you sign lots of contracts. The bank says, "we will lend you up to $X, and you will pay us back all the money plus interest, plus penalties. A) If you default on even one of your credit cards, the interest rates on other cards you own might go up. B) You usually get low rates for the first six months, and then much higher rates, and if you miss a payment, your interest rates might be as high as 20% or more. This post is in response to a question I got a few weeks ago. I'm really depressed and I think my wife is going to leave me and I have to put food on the table for three kids. If you borrowed 00 on your credit card, the bank will sell it to a hedge fund for . So now the hedge funds have made 100% on their investment. They look at the ages of the borrowers (younger age means they will pay less money), they look at the age of the debt (older means they will pay less money for the debt), and yes they look at race and gender and what state you live in. In 1994, collection agencies would call me and I would get scared.
There's usually other terms in the fine print, by the way. No problem: they borrow money from the US government, and the government will seize customer savings accounts if the bank defaults. I'm being very rough here, but that's 0 billion in potential profits. Easy: they pay 3 to 6 cents for every dollar you borrowed. Maybe they give the collection agencies, on average, two cents. By the way, hedge funds analyze these collections of bad credit card debt like they would any other investment.