The topic of the discussion is how to prepare for a merchant cash advance when the credit card holder defaults on a purchase. During the discussion they also discuss some things that may occur if the customer does not pay for his or her purchase.
When the consumer fails to pay, a charge will be issued and it is due the next day. It can be reported as being paid on time. If it is reported as being paid late, the lender will investigate further and will then try to collect on the late payments.
If a credit card holder does not have the money needed to pay the bill, the lender has the right to take action against the cardholder. There are many types of actions that are available such as legal action. These actions are often not in the best interest of the cardholder.
When this happens, the consumer has several options. Some of the other options include the credit card issuer reducing the balance owed, getting rid of the card, getting another credit card, and even filing bankruptcy.
In some cases, the cardholder can be offered a reduced balance if he or she does not pay the credit card. This usually requires that the charge is reported to the credit bureau as paid on time.
There may be other situations where the cardholder is asked to pay the debt in full before the creditor takes any action. For example, if the consumer is a frequent shopper, and the store requires a purchase by a certain date, there is probably no need for the charge to be reported as paid on time.
All of these options can be considered if the customer has a credit card, is not in arrears, and is in good standing with the credit card company. When a charge card is used by a merchant to accept credit card payments for goods or services, the billing process is not always done on time.
In this case, the merchant’s charge is considered a purchase and is reported to the merchant’s charge card processor as paid on time. However, when the card is used by a consumer to make a purchase online or for any other purpose, the charge will be reported as not paid on time. The consumer is asked to pay the charge back, and the charge card account will then be credited for the money.
If the card account is not charged back for the money owed, it can be reported as a “closed” account. This means that the charge cardholder will receive a report stating that there is still a balance owed on the account.
This “closed” balance is reported to the credit agency each month and they will begin collection efforts against the cardholder. If the balance is not paid off in full each month, the debt will continue to increase until the balance is paid off.
In some situations, there are special methods that the card issuer uses to charge the cardholder’s account. These are known as “add-backs” and include adding the total of all past due balances to one account and then charging the card at a higher rate than usual.
If the cardholder is unable to pay the balance off in full each month, they are then required to pay back the balance and credit their charge card account with a higher limit. This new charge will be reported to the credit agency as “paid on time.”