Do credit card companies insure themselves if someone stops paying on their card?

Question

Do credit card companies insure themselves if someone stops paying on their card?

Answer 1

I dont quite understand your understanding

of insure. They will call you until you pay

them or make some sort of agreement with

them. Once its charged off that means they

sold your debt to a collection agency for

pennies on the dollar so also they can

take that loss on their taxes. But youre

still stuck with the debt now the collectors

will try to harass you for a long time, you

can haggle with them and maybe pay

50% of what you owe. But if no agreement

is made and you want to ride out the

statute of limitation without paying good

luck after 7 years youre free and clear.

But if they decide to sue you before this

time you have to go before a judge and

plead your case why you couldnt pay at

the time, but if youre a no show like most

people theyll automatically get a judgement

against you and the judge might decide to

give them this judgement against your

propertkyt or any assets you have so if

its a small amount I would recommend a

settlment with the collectors but if its a

large debt and theres no income/no job/

there will be a default judgement but it will

likely go nowhere.

Answer 2

If they are unable to collect a debt, they will write it off their taxes as uncollected.

Answer 3

No....they make up for losses by charging exorbitant interest rates to their paying costumers....Don't shed any tears for the credit card companies....regardless of defaults they still make a ton of money.

Answer 4

You stop paying....they sue you.

You stop paying...your credit rating will get tanked. That means things like your insurance premium, other credit cards rates go up. You will have a more difficult time getting loans and the ones you can get will have much higher interest rates.

The credit card company has insurance for losses due to fraudulent charges. But not because you did not pay your bill. You will be held responsible for your charges.

Answer 5

The card company is insured as a business in general but they are not insured against client default. There's no way they could keep up with that.

The recourse for a client who stops paying is to hound them day and night in an attempt to get their money back.

If they are unsuccessful they sell your account to a collection agency to do the same thing

If they are unsucessful they sue you and get a judgement to collect usually by wage garnishment and/or repossession of assets.

Credit means just that....someone is lending you their money that you promised to pay back.

Answer 6

credit card companies normally have a Financial Institution they rely on for Banking for instance "CitiBank" has Clients such as RadioShack, Zales, Sears, Macys and other large vendors what they do is we attempt to collect on a debt if the amount of money that we require has not been met for normally around 200 consecutive days then at that point would CitiBank Charge off the acct and sale it at a discounted rate another colletions company who deals stricktly with pastdue or unpaid debts and they will continue to call daily, unfortunaly with collections companies that company will in fact call daily until their debt is paid at that time when they either sue and will take someone who hasnt paid to court, however on a credit card without court setting they cannot go into a home or whoever holds the items purchased and take them back fro payment, they cannot and will not without proper court documentation. there are several different steps that will be taken before any of this happens. Once the "Collection agency" has collected a portion or some of the money in the ways they are allowed and legally can do they will have then paid the Bank which orginally had the debt back a certain percentage could be alot less could be a good amount but it just depends what collections agency purchased the debt and how much they agreed to pay the Bank back percentage wise once the debt is resolved in a what the assume is acceptable manor-  when you get a credit card however its normally NOT with that business it just has their logo or name on it, unless however it came directly from a Bank it willl be financed through someone different same procedure is followed if its a Bank Credit Card....