Credit card debt is an example of unsecured consumer debt, accessed through ISO 7810 plastic credit cards. Consumer debt is Consumer credit which is outstanding In macroeconomic terms it is debt which is used to fund consumption rather than ISO/IEC 78102003 is an International standard that defines four formats for identity or Identification cards ID-1 ID-2 ID-3 and ID-000 A credit card is part of a system of Payments named after the small Plastic card issued to users of the system

Debt results when a client of a credit card company purchases an item or service through the card system. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent. Interest is a fee paid on borrowed capital Assets lent include Money, Shares, Consumer goods through Hire purchase, major assets

The results of not paying this debt on time are that the company will charge a late payment penalty (generally in the US from $10 to $40) and report the late payment to credit rating agencies. Being late on a payment is sometimes referred to as being in "default". In Finance, default occurs when a debtor has not met its legal obligations according to the debt contract e The late payment penalty itself increases the amount of debt the consumer has.

When a consumer has been late on a payment, it is possible that other creditors, even creditors the consumer was not late in paying, may increase the interest rates the consumer is paying. This practice is called universal default. Universal default is the term for a practice in the Financial services industry for a particular lender to change the terms of a Loan from the normal terms to the

Contents 1 Credit card debt statistics 2 Bankruptcy concerns 3 Political aspects 4 References

Credit card debt statistics

• United States (April 2005) $735 billion^[1]
• United Kingdom (July 2004) £55. The United States of America —commonly referred to as the The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom, the UK or Britain,is a Sovereign state located 1 billion^[2]
• Australia (2007) $41 billion (AUD) [1]

Credit card debt is said to be higher in industrialized countries. For a topic outline on this subject see List of basic Australia topics. The average U. S. college graduate begins his or her post-college days with more than $2,000 in credit card debt. ^[3]

Bankruptcy concerns

Sometimes the late fees, high annual percentage rates (APRs), and universal default overcome consumers who frequently do not pay off their debt, and the customer declares bankruptcy. Annual percentage rate (APR is the simplified counterpart to the Effective interest rate that the borrower will pay on a loan Universal default is the term for a practice in the Financial services industry for a particular lender to change the terms of a Loan from the normal terms to the Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against If a customer files for bankruptcy, the credit card companies are required to forgive all or much of the debt, unless such discharge of debt is successfully challenged by one or more creditors, or blocked by a bankruptcy judge on legal grounds irrespective of creditors' challenges.

Because forgiveness of debt reduces likelihood of profit and continued survival, the companies are generally willing to offer another deal to the consumers in danger of bankruptcy. This deal consists of reduced APRs, removal of past late fees and penalty charges, and reaging the accounts so that the credit agencies see them as late accounts.

Political aspects

Some credit card companies made lobbying efforts at the federal level to tighten American bankruptcy law, making it harder to have credit card debts canceled. Lobbying includes all attempts to influence Legislators and officials whether by other legislators constituents or organized groups Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay their Creditors Creditors may file a bankruptcy petition against ^[4] Recently it was reported that Americans are paying off credit card debt more frequently, and this was attributed in part to the bankruptcy legislation supported by the companies. ^[5]

Germany, as an example for a country which did not have a notion of personal bankruptcy at all until the early 2000s, and still makes the process much more difficult than the United States, has consistently had much lower levels of credit card debt. Germany, officially the Federal Republic of Germany ( ˈbʊndəsʁepuˌbliːk ˈdɔʏtʃlant is a Country in Central Europe. On the other hand, a debtor in Germany is very much in a worse position than one in the United States.

References

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