Collection Charge - What Does This Mean?
It's a drag having to put up with debt collectors.
If they aren't constantly calling you on the phone, then they are sending you reminders in the mail.
You should always look at your bills closely to make sure you're not being mistakenly charged for something.
Always ask for an itemized bill, and be on the watch for something called a collection charge.
A collection charge can appear on a credit card statement, regular bill or letter from a debt collector.
In theory, this is a charge that's added on to cover your creditor's overhead associated with the collection of your money.
It costs them money to chase people down, so it's only fair that they get compensated for the extra work involved.
At least that's what they want you to think.
However, a lot of these charges are simply a way for them to generate higher profits.
Whether they are legitimate or not, they are arbitrary fees, and not part of the principal that you owe.
Therefore, these charges should be some of the first to go when negotiating payments.
One collection charge can really start adding up if it is added to your principal, and then calculated with compound interest.
So be sure to have them subtract any interest associated with the charge as well.
Another thing you can do is check your local laws.
Most jurisdictions have limits on the amount of collections charges a creditor can add to your account.
If they got over this amount, then you can take them to court, notify the appropriate regulatory body in your jurisdiction...
or both! The one thing you shouldn't do when faced with illegal charges is pay them.
Once you let the debt collector know that you are aware of their breaking the law, they may be much quicker at forgiving the charges.
Even if they drop the collections fee, that doesn't stop you from reporting them if you wish to do so.
Remember, it's your money! It is your responsibility to keep a close eye on it.
It is also your responsibility to have any mistakes corrected as soon as possible.
Don't let anyone--including a debt collector--push you around into spending money that doesn't really need to be spent.
This way you will be able to keep more of the money that you worked so hard to earn, and use it to get the things you really enjoy.
If they aren't constantly calling you on the phone, then they are sending you reminders in the mail.
You should always look at your bills closely to make sure you're not being mistakenly charged for something.
Always ask for an itemized bill, and be on the watch for something called a collection charge.
A collection charge can appear on a credit card statement, regular bill or letter from a debt collector.
In theory, this is a charge that's added on to cover your creditor's overhead associated with the collection of your money.
It costs them money to chase people down, so it's only fair that they get compensated for the extra work involved.
At least that's what they want you to think.
However, a lot of these charges are simply a way for them to generate higher profits.
Whether they are legitimate or not, they are arbitrary fees, and not part of the principal that you owe.
Therefore, these charges should be some of the first to go when negotiating payments.
One collection charge can really start adding up if it is added to your principal, and then calculated with compound interest.
So be sure to have them subtract any interest associated with the charge as well.
Another thing you can do is check your local laws.
Most jurisdictions have limits on the amount of collections charges a creditor can add to your account.
If they got over this amount, then you can take them to court, notify the appropriate regulatory body in your jurisdiction...
or both! The one thing you shouldn't do when faced with illegal charges is pay them.
Once you let the debt collector know that you are aware of their breaking the law, they may be much quicker at forgiving the charges.
Even if they drop the collections fee, that doesn't stop you from reporting them if you wish to do so.
Remember, it's your money! It is your responsibility to keep a close eye on it.
It is also your responsibility to have any mistakes corrected as soon as possible.
Don't let anyone--including a debt collector--push you around into spending money that doesn't really need to be spent.
This way you will be able to keep more of the money that you worked so hard to earn, and use it to get the things you really enjoy.