Are Creditors Caving In to Economic Pressure?
Many struggling borrowers will surely jump at the chance to erase half their debt. But while it may well be true that credit card companies are becoming more flexible on settling delinquent accounts, credit card holders should not get the impression that some small victory has been achieved against credit issuers. The truth is, credit card companies don’t negotiate with borrowers; what they do is make calculated business decisions, which, in the interest of their bottom line, generally don’t benefit customers. This is because when it comes to bargaining power, consumers who try to take on credit issuers don’t have a leg to stand on. Take Edward McClelland, the man featured in Monday’s New York Times piece. He was making “fitful” payments on his $5,486 balance, which had been cancelled for delinquency. HSBC, his credit card issuer, agreed to let him pay half. Sounds like a a sweet deal for Mr. McClelland, right? Well, not exactly. What the article fails to mention is that it’s unlikely
