Credit Bailout: Issuers Slashing Card Balances – NYTimes.com
HSBC told Edward McClelland it would forgive 20 percent of his balance if he paid it off. He declined and later got a better deal.By DAVID STREITFELD
Published: June 15, 2009The banks were bailed out last fall, the automobile companies last winter. For Edward McClelland, a writer in Chicago, deliverance finally arrived a few days ago.
Mr. McClelland’s credit card company was calling yet again, wondering when it could expect the next installment on his delinquent account. He proposed paying half of his $5,486 balance and calling the matter even.
It’s a deal, the account representative immediately said, not even bothering to check with a supervisor.
As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed.
The practice started last fall as the economy worsened. But in recent months, with unemployment topping 9 percent and more people having trouble paying their bills, experts say this approach has risen drastically.
read article here… Credit Card Issuers Settle Accounts for Lower Balances – NYTimes.com.
