Debt. The word comes from the French dette and ultimately Latin debere (to owe), from de habere (to have). The letter b in the word debt was reintroduced in the 17th century, possibly by Samuel Johnson in his Dictionary of 1755— several other words that had existed without a b had them reinserted at around that time. Debt is that which is owed; usually referencing assets owed, but the term can also cover moral obligations and other interactions not requiring money. In the case of assets, debt is a means of using future purchasing power in the present before a summation has been earned. Some companies and corporations use debt as a part of their overall corporate finance strategy. A debt is created when a creditor agrees to lend a sum of assets to a debtor. In modern society, debt is usually granted with expected repayment; in most cases, plus interest. (http://en.wikipedia.org/wiki/Debt)
Credit Card is a small card that authorizes the person named on it to charge goods or services to his or her account. It differs from a debit card, with which money is automatically deducted from the bank account of the cardholder to pay for the goods or services. Credit-card use originated in the U.S. in the 1920s; early credit cards were issued by various firms (e.g., oil companies and hotel chains) for use at their outlets only. The first universal credit card, accepted by a variety of establishments, was issued by Diners' Club in 1950. Charge cards such as American Express require cardholders to pay for all purchases at the end of the billing period (usually monthly). Bank cards such as MasterCard and Visa allow customers to pay only a portion of their bill; interest accrues on the unpaid balance. Credit-card companies get revenue from annual fees and interest paid by cardholders and from fees paid by participating merchants.(http://www.answers.com/topic/charge-card)
With the advent of credit cards, most often than not, instead of being relieved from our financial burdens, this plastic had been the source of many financial woes due to the ready credit it provides. The clothes, the shoes, the gadget you love are just a swipe away, even if you have no cash. For some, they are constrained in using the credit card for legitimate needs like grocery and milk for kids. For some, the earning is simply not enough because of early marriage, or only one spouse is working, or in instances where although both spouses are working, the salary, however, is very low. There are numerous reasons, why people convince themselves that they need to have a credit card. Then come payment time, at first, you get to keep up with the payment. Eventually, it is preceded by the vicious cycle of accumulation of debts until you find yourself barely making the minimum and before you knew it, it has gotten out hand and collection letters have arrived. You would want to pay, but you do not know where to get the fund.
So you are in debt! Who among us wants to be buried in debt? Nobody likes to be in the position of the debtor. However most of us, due to various circumstances, found ourselves buried in debt wagon.
Today, I’m going to share with you, my research in this 3-part blog to determine the extent of answerability for non-payment of Credit Card.
Miss X got pregnant when she was in College; she gave birth and went back to school to finish her degree, and was able to land a job. The salary at her work is just enough to make ends meet. At work, she was offered an application form for a credit card which was eventually approved. With her new credit card, a world of possibilities is just a swipe away.
The usual problem faced by unplanned pregnancy / early marriages is: financial instability. One was not able to prepare one’s self financially, especially if one is not from a wealthy family. There is no savings or extra money to provide a cushion during tough times like medical emergencies and school expenses. Miss X is thankful for the credit card because when her son got sick, she swiped the medicines. Miss X was only able to pay for the enrollment of her son, but for school supplies, uniforms and shoes, she used her credit card. At first, Miss X only uses the credit card for emergency purposes, and she pays the full amount when it becomes due. But because of the many temptations that one faces of having a credit card, and based on testimonies from other office mates that the credit card company allows a minimum payment, Miss X, during crunch time, tried paying just the minimum because it seemed affordable, just 5% of the unpaid balance of 1500. However, the need to swipe some more became frequent, and Miss X had missed a payment when she needed the money badly that was supposed to pay her card obligation. The misfortunes had become rather frequent on Miss X life that one day, she woke up with a total of P20,000 in credit card debt. From P500 pesos minimum payment each month, the monthly payment increased to over a thousand caused by the missed payment which accumulated her credit card debt. The minimum payment requirement has reached up to more than P2000 a month, more than half Miss X’s semi-monthly salary. And, she got frustrated that despite laboring, of paying the minimum each month, the credit card debt seemed to escalate rather than diminish considerably due to late payment, finance charges due to late payment, over-limit fee, and the membership fee. Until she could not afford any longer to pay it, not because she intentionally want to defraud the company, but because she have more pressing needs like the needs of her son rather than pay it to the credit card company who compounds the interest of her credit card debt, that everything she pays just goes to the interest. Eventually, she stopped paying her credit card. Calls reminding her came in every day. Letters to remind her came often, and one said that it will soon be turned over to the legal department. And then a call was received, from somebody introducing herself from the law office. The caller was very demanding to the extent of telling Miss X, that you should not have gotten yourself in debt when you can’t afford to pay it. Miss X, tried, to negotiate to allow her to pay for a fixed amount until she can pay off her debt, even just a little, just what she can afford, because she really wants to pay off her debt. She wants to commit a little every month, no matter how long will it take her as long as she can fully pay her obligation. However, the collector won’t budge and is insistent that she pays a full amount. Eventually, she got a letter with an attachment including a certain provision of RA 8484:
SECTION 9. Prohibited Acts. — The following acts shall constitute access device fraud and are hereby declared to be unlawful:
(c) using, with intent to defraud, an unauthorized access device;
(d) using an access device fraudulently applied for;
(j) obtaining money or anything of value through the use of an access device, with intent to defraud or with intent to gain and fleeing thereafter;
*end of Part 1*
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