Repercussions Of Holiday Shopping With Credit Cards

Shopping With Credit Cards

It’s important to maintain a manageable debt, as failing to pay your credit card off will lead to collection calls, garnished wages and a hit to your credit rating.

Debt Collectors’ Calls

The first reminder that you’ve forgotten to pay your bill is the debt collector calling you. Thanks to the Fair Debt Collection Practices Act, debt collectors cannot call you at work, especially if you make them aware that you cannot accept these types of calls at work. They may also not call you before 8 a.m. and after 9 p.m.

However, the law is geared to third-party collection agencies, not the actual organization trying to get the debt. A credit company can call you at work even if you ask them to stop to collect their debt. These legal restrictions don’t go into effect until a collection agency is involved.

Wage Garnishments

Debt collectors can turn to wage garnishments if they cannot attain payment from the debtor. This involves them going to court and getting an order for wage garnishment, allowing them to remove the money from the paycheck.

This also has limits. According to the Consumer Credit Protection Act, only 25 percent of the earner’s disposable income can be removed from the paycheck. The remaining amount to remain needs to equal to 30 hours a week. Some states have laws that restrict how much can actually be garnished.

It’s possible the amount taken for wage garnishment leads to a paycheck that’s less than $220.

The more debts you have, the more deductions can be taken from your paycheck. If more than one credit does a wage garnishment, it’s first come, first served. Therefore, the second creditor will need to wait until the first creditor has been paid to get their money back.

Warning: Be Mindful About Debt Consolidation

There are many advertisements about debt consolidation, and while they sound good, it may be too good to be true. When it comes to negotiating for a decrease in your credit card payments, it doesn’t mean you’ll pay less overall. You credit report and ability to attain future credit could be seriously damaged by a debt negotiation. You should only work with a debt reduction service if you see no other choice and they are legit.

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