CSIMarket


Terms Beginning with C
       
       
 

Contractual Credit Card Charge-Off

Financial Term


A contractual credit card charge-off is a situation when a credit card issuer writes off an account as a bad debt, usually after 180 days of non-payment. This means that the issuer removes the account from its books and reports it to the credit bureaus as a charge-off, indicating that the debt is unlikely to be collected.

In the financial industry, contractual credit card charge-off is used as an accounting practice to reflect the issuer's losses and manage its risk. When a credit card issuer charges off a delinquent account, it takes a loss on the balance owed and reduces its overall profits. However, it also allows the issuer to move the account out of its active portfolio and focus on collecting from other customers.

For the consumer, a contractual credit card charge-off can have severe consequences on their credit score, as it is one of the most negative entries that can appear on a credit report. It can also lead to collection efforts and legal action by the issuer or a third-party debt collector.

In summary, contractual credit card charge-off is a common practice in the financial industry to reflect losses and manage risk. However, it can have serious implications for consumers, including damage to their credit score and collection efforts.


   
     

Contractual Credit Card Charge-Off

Financial Term


A contractual credit card charge-off is a situation when a credit card issuer writes off an account as a bad debt, usually after 180 days of non-payment. This means that the issuer removes the account from its books and reports it to the credit bureaus as a charge-off, indicating that the debt is unlikely to be collected.

In the financial industry, contractual credit card charge-off is used as an accounting practice to reflect the issuer's losses and manage its risk. When a credit card issuer charges off a delinquent account, it takes a loss on the balance owed and reduces its overall profits. However, it also allows the issuer to move the account out of its active portfolio and focus on collecting from other customers.

For the consumer, a contractual credit card charge-off can have severe consequences on their credit score, as it is one of the most negative entries that can appear on a credit report. It can also lead to collection efforts and legal action by the issuer or a third-party debt collector.

In summary, contractual credit card charge-off is a common practice in the financial industry to reflect losses and manage risk. However, it can have serious implications for consumers, including damage to their credit score and collection efforts.


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