Given That a Credit Card Company Can “Take Your House,” Why Are Credit Card Rates So High?
My impression is that if a person declares bankruptcy, credit card companies can force the person to sell their house and use the proceeds to pay off the credit cards.
So, if a person owns a house, why do credit card companies charge such high interest rates?
I am aware that lots of elderly people who own their houses pay roughly 30% APR on their credit cards
Houses are generally exempt from bankruptcy.
If an elderly person is paying 30% APR on a credit card, they either have a bad credit score or they didn’t look at what they were signing up for. 30% APR is usually reserved for those that have terrible scores or have made late payments.
It’s not even close to being that simple.
If you file bankruptcy, your unsecured (no collateral) debts are liquidated. Wiped out.
Some states give a large exemption for your home. Some give little to none. So it varies, though even that might be different with the new BK laws.
And they’d have to secure a judgment in court, then force the sale, and honestly, if that’s even possible anywhere in the country, I’d be pretty surprised.
But they charge high rates because they can. People continue to be dumb enough to keep taking these credit cards regardless of the interest rate on them. If no one was willing to take them, they’d be forced to drop their rates to entice you to borrow. But we make it far too easy for them.
First of all no one can take your house….. if you are living in the one home you own! All they can do is put a judgment against you! They will only get there money when you decide to sell your home. NO ONE CAN MAKE YOU SELL YOUR HOUSE FOR BILLS OR ANYTHING ELSE! Everyone has bills… if that was the case no one would have a home!
Credit card companies generally charge higher interest rates because they can get away with it. Also, if a person has a bad credit history the are more of a risk to the credit card companies so of course they will have to pay a higher rate. If someone has good credit there are plenty of credit card companies out there that offer lower rates.
The mortgage holder wll have first claim on the house. Credit cards are (usually) unsecured debt. Anybody who has no mortgage (or equity line of credit) and pays 30% on a credit card balance is dumb dumb dumb dumb.
If they have to seize your house, they’ll have to pay a lot of fees.
If your credit score is good, apply for a low interest credit card !
High APR means bad credit. I doubt if the figures you’re quoting are general.
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