3 Tips How to Solve your Credit Card Problem

A P30,000 credit card debt that ballooned to almost P1 million because of interest charges?

(In US dollars, that’s $21,740 payment for a $652 credit card debt!)

Crazy, isn’t it?

Apparently not for the debt collection agency pestering PMT Forum member cheesycake who shared that a legal office sent her a letter demanding that she pay almost one million pesos for a P30,000 credit card debt she incurred four years ago.

At that rate, cheesycake is being asked to shoulder a compounded, monthly interest rate of around 7.50%! That’s a hefty 7.50% interest rate being compounded every month!

Compare that with the meager 0.50% to 1.00% interest rate for savings accounts per year offered by banks! Crazy indeed, isn’t it?

Debt collection agency tactic

A friend of mine, a lawyer, who used to work for a debt collecting agency told me that this really is a way for debt collection agencies to make money.

Credit card companies that fail to get payments from customers pass these uncollectible debts to a collecting agency normally staffed by lawyers and paralegals.

Armed with legalese, the collection agency sends demand letters to defaulting customers and threatens them with legal action if they won’t pay their credit card debt.

Collecting agencies resort to this threat tactic because they usually work on a “No collection, no pay” scheme.

If ever the customer pays, the credit card company gets a fixed share from the payment, while the rest is pocketed by the collecting agency.

You can thus imagine why the debt collection agency is demanding a lot compared to the original credit card debt incurred by the customer.

3 Tips How Not to be Drowned in Debt

So how not to be drowned by credit card debt? We have three (3) basic credit card tips:

  • 1. Don’t get a credit card if you won’t be able to meet the monthly payments;
  • 2. Use your card prudently; and
  • 3. If you use one, don’t run away from your obligation to pay.

PMT Forum member jigger also shared a friend who cannot get a bank loan after being blacklisted because he had a due record for non-payment of credit card debt.

Don’t ever think that a credit card debt you’ll decide not to pay will not come back to haunt you. They usually do.

So if you don’t want to be drowned in debt, simply follow our 3 basic tips on credit card use. To reiterate:

  • 1. Don’t get a credit card if you won’t be able to meet the monthly payments;
  • 2. Use your card prudently; and
  • 3. If you use one, don’t run away from your obligation to pay.

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14 thoughts on “3 Tips How to Solve your Credit Card Problem”

  1. I had a similar post on credit cards with the link posted.

    I just want to share that no one gets into jail by not paying credit cards since this is just a civil case. The case will be ‘Sum of Money’. In contrast, a case for example Batas Pambansa 22 (BP 22) or more commonly known as Bouncing Checks Law is a criminal case and this could get you into jail.

  2. Don’t be intimidated by collection agencies that use scare tactics. They will not and cannot get to you unless you expressly permit them. Instead, try to deal directly with the card company via their complaints department and question why they are allowing such collection agencies to represent them in that manner.

    Here is an important number to remember when dealing with unfair credit card companies and collection agencies.

    Bangko Sentral ng Pilipinas, Consumer Affairs Group

  3. I always buy things by cash rather than credit card. It’s pretty alarming more and more young adults are involved in credit card bankruptcy.

  4. I agree with Emo, it is better to talk to credit card companies. Try to negotiate with them, and sometimes they are offering installment basis for your payment without penalty, but with a little interest.

  5. We have a new law right now RA 8484 punishing a credit card holder who has no intention to pay his credit card debts and surreptitiously leaves his place of residence or work.

  6. the wife of a friend of mine used her credit card to loan the maximum credit limit to the amount of 2 million pesos and does not plant to pay back the credit card companies. She now hides in a different address from the cards mailing address. this is certainly not right.

  7. she currently operates a steak restaurant along T. Morato under the name Steak Doctor. So for credit card collectors reading this comment, pls leave a message for me to forward to you her whereabouts. thanks and a happy debt free new year to all you good guys.

  8. what if the consumer cannot pay due to unemployment.. can these collection agencies confiscate personal belonings/properties?

  9. Having such experience really is a tough one. So better getting into credit cards, loans and other transactions, better ask ones self if there really is a need to get one. One should as well make a self definition of his financial capability to pay on time to prevent unwanted charges or yet worse get blacklisted.

  10. Hi,

    Good day! My name is Joseph Dimaculangan. I’m a VISA credit card holder. Bago palang ako nagkaron ng credit card sa Eastwest, I received it just this month of June 2015.

    May tumawag sa akin na globe number (0927-886-2308). His opening spiels is “Good morning May I talk to Mr. Joseph Dimaculangan” I response, I said “Yes, speaking. How may I help you?”

    Sabi nya from Air Asia International daw sila (as far as I remember, not so sure the company name he used) for points lang daw para ma document at ma claim parang ganun. Sabi pa nya na recorded daw ang conversation namin for my protection. Kaya naman naging kampante ako kasi Globe number din yung tumawag sa akin last time to inform me na activated na yung card ko kaya bka affiliated nga yung company na tumawag sa akin sa inyo. Then he asked me to verify my card number, binanggit nya ang 8 first digit credit card number , then ako na daw ang magsabi ng 8 last digit number to verify nga na ako yung card holder, so sinabi ko. Tinanong nya ang member since, valid until, sa kasamaang palad naibigay ko din (kasi komportable na ako sa kanya may pa GOD bless, GOD bless pa sya na nalalaman).

    Then sinabi nya na kailangan din daw nya i-verify kung pang ilan ako sa 999 na applicants na approved. Kailangan ko daw sabihin sa kanya ang 3-digit number na makikita sa likod. Doon na ako nag hinala na teka baka SCAM na ata to ah.. Buti nalang I personally experienced mag purchased ng flight ticket using my other creditcard. Na kailangan ung number sa likod to pushed through yung transaction. So nag reason out na lang ako na hindi ko naman talaga dala yung card ko. Tapos pinipilit nya ako kung ano daw oras ng pag uwi ko para matawagan nya ako ulit. Sabi ko na lang na hindi ko pa alam kasi I need to do some office works.

    Before we ended our convo he said na included daw sa card ang PIN ko for cashout. wag na wag ko daw ibibigay kahit kanino, pero gusto naman nila makuha for docu din. Sabi ko nalang “sorry hindi ko din alam eh actually hindi pa dumadating” Nung wala na sya makuha na more important details, nag advise sya na tatawag nalang and he ended the call.

    After that, I reported immediately sa EASTWEST callcenter ang lahat lahat ng napag usapan namin noong July 22, 2015. Ipina block ko agad yung card ko and requested for another card.

    Now, I just want to share this incident kasi bka may mga partners sila na ibang agents or sa courier, I dont know. Kasi first of all bakit alam nila ang name ko and yung first 8-digit number (maybe because generic ung first 8-digit number?). This is a serious problem. Paano kung matapatan nila yung mga taong madaling magtiwala, or yung hindi aware sa mga scammers.

    Kaya tayo wag tayo agad agad magbibigay ng mga importanteng details lalo na sa creditcards.

    Kais yung barkada ko, EASTWEST CC holder din. Na experienced nya din same as mine, nauna lang sya ng mga ilang weeks pero siguro nahihiya sya i-brought up ang nangyari kasi lahat talaga ng detail na ibigay nya pati yung 3-digit numbers sa likod. Saka nya lang nasabi nung nagkwento na ako na ganun din nangyari sa kanya. But nalang na ireport daw nya agad.

    Hope nakatulong tong experienced ko sa inyong lahat,


    Be careful always.


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