Michigan

Wow...credit card companies are now paying consumers to close their accounts

I just read a very interesting article in USA Today. It talked about credit card companies like American Express paying some consumers $300 to pay off and close their accounts. I have never seen anything like this before. It appears that these banks are targeting those consumers that are carrying balances and not charging very much.

Its just like I have been telling my clients for years; if you are pursuing someone for a debt, you are in a race for your money, competing with other creditors. The banks are finally getting around to realizing this. They want to be paid first because they now know that the race is on and if they are going to get their money, they have to win that race.

If you are approached by your credit card company, you may want to consider their offer to close your account. Just make sure that they promise (in writing please), to report that you were the one to have closed the account on your credit report. By doing so, you will preserve your rights under the Fair Credit Reporting Act and perhaps even under the Fair Debt Collection Practices Act. You do NOT want a notation that says "Account closed by lender" or any such thing. You want to it reported on your credit report as "Account closed by consumer." Now, the bank may threaten to close your account anyway if you do not accept their offer. That is probably their prerogative under the credit card agreement. However, if the bank wants to terminate this relationship amicably and they certainly don't want you make a fuss about whose idea it is to close your account, simply insist on this provision in your credit file. By the way, did I mention that you should get that in writing? :)

Full post as published by Michigan Collection Law Blog on March 08, 2009 (boomark / email).