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What should I do when a credit card debt collector contacts me?
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Receiving a call from a debt collector can be a stressful experience. After all, if your debt is in collections, you may be worried about the potential impact the delinquent debt can have on your finances, the possibility of legal action by the debt collector and how to handle the communication effectively. That’s a legitimate concern considering that the way you handle initial contact from a debt collector can significantly impact your financial future.
Your initial response to a debt collector’s contact can set the tone for the entire debt resolution process. Making the wrong moves — such as immediately acknowledging the debt or making promises to pay, for example — could complicate your situation or even restart the statute of limitations on old debts. On the other hand, understanding your rights when your credit card debt is in collections and taking appropriate action can help you maintain control of the situation and work toward a resolution that fits your circumstances.
Millions of Americans face similar situations with debt collectors every year and there are established protocols in place to help you navigate this challenge. So how exactly should you handle being contacted by a debt collector about old credit card debt?
Find out what your debt relief options are here.
What should I do when a credit card debt collector contacts me?
Here are a few moves you should make when you’re contacted by a debt collector about your credit card debt:
Stay calm and gather information
The first thing to do when a debt collector contacts you is to remain calm. Take a deep breath and prepare to gather as much information as possible during the call. In general, debt collectors are required by law to provide specific details about the debt, including the original creditor’s name, the amount owed and other relevant information, all of which you’ll need to determine a path forward.
During the call, you should also write down the debt collector’s name, the company they represent and their contact information. You also have the right to request a written validation notice, which will confirm the debt amount, the original creditor and your rights in the debt collection process. The Fair Debt Collection Practices Act (FDCPA) mandates that debt collectors provide this notice to you within five days of the initial contact.
Learn more about how to tackle old credit card debt today.
Confirm the debt and verify its accuracy
After receiving the validation notice, take time to verify the debt’s accuracy. Mistakes can happen, and debts may be sold multiple times, leading to possible discrepancies, so review the information carefully to confirm that the debt is yours and that the amount is correct. If there’s an error, you have the right to dispute the debt in writing within 30 days of receiving the validation notice. The debt collector must cease collection efforts until the dispute is resolved or the debt is verified as accurate.
Understand your rights (and what to expect)
Debt collectors must adhere to strict guidelines under the FDCPA. They cannot harass, threaten or deceive you. Familiarize yourself with your rights to feel empowered in your interactions with the collector. For example, debt collectors cannot:
- Call before 8 a.m. or after 9 p.m.
- Contact you at work if you’ve told them not to
- Use threatening or abusive language
- Make false statements or misrepresent the debt
- Contact others about your debt except to locate you
Come up with a plan of action
Start determining a plan of action by assessing your financial situation, including your income, expenses and any other debts. This will help you determine how much you can realistically afford to pay each month. From there, you can weigh your options, like paying the debt in full, negotiating a reduced amount or exploring other debt relief options.
What debt relief options should I consider?
If you decide to try and use debt relief to get rid of the debt, here are the options you may want to consider:
- Debt consolidation: With debt consolidation, you combine multiple debts into a single loan, generally with a lower interest rate. This could result in a lower monthly payment and make it easier to keep track of your debt.
- Debt settlement: Another option is to negotiate with the debt collector to settle the debt for less than the full amount, which is known as debt forgiveness or debt settlement. Some people choose to work with debt relief companies that negotiate on their behalf, while others choose to negotiate directly.
- Credit counseling: Many credit counseling agencies offer debt management plans, agreements where the agency negotiates with your creditors to reduce interest rates and fees. This can be a useful option if you need structured assistance but don’t qualify for debt consolidation or settlement.
The bottom line
Facing a credit card debt collector can be intimidating, but with the right approach, you can turn it into an opportunity to regain control over your finances. Start by gathering information, verifying the debt and understanding your rights. From there, create a plan and explore debt relief options such as consolidation, negotiation or credit counseling to find a solution that aligns with your financial goals. Being proactive and informed can make the difference in managing your debt and building a stronger financial future.
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Interest rates are heading down again, according to the Federal Reserve. On Thursday, the Fed issued another cut to its federal funds rate, the second in the last three months. Now at a range between 4.50% and 4.75%, the rate is down 75 basis points from where it was in early September and it could fall further again when the Fed meets for the final time in 2024 on December 17.
While these cuts will reduce what savers can earn with high-yield savings and certificates of deposit accounts (CDs), they will help borrowers who have been contending with higher rates on a variety of loan products. For those who are considering accessing their home equity now, or for those who already have a home equity line of credit (HELOC), this can be particularly advantageous. So what does the new Fed rate cut mean for HELOC interest rates? That’s what we’ll break down below.
See how low of a HELOC interest rate you’d qualify for here.
What the Fed rate cut means for HELOC interest rates
In short: The latest Fed rate cut is good news for HELOC interest rates and for those borrowers who have already decided to access their home equity with the line of credit. That’s because HELOC rates tend to follow the Fed more closely than other products. Mortgage rates, for example, influenced by factors like the 10-year Treasury yield, have not dropped as significantly as home equity loan rates have in recent months. But home equity rates more closely match the path that the federal funds rate takes, so if that’s declining HELOC rates will, too.
This can be seen clearly because HELOC rates change daily and are variable, meaning that the HELOC rate you saw listed on lender websites early this week is likely lower now and could be even lower next week. With an additional cut in December pegged at an almost 65% likelihood by the CME Group’s FedWatch tool, rates on HELOCs could fall further still. And if that likelihood increases based on additional economic considerations, lenders may start pricing in that reduction in advance of it being formally issued.
This is all positive news for both those who have yet to apply for a HELOC and for those who already have one. Since HELOC rates change monthly, current borrowers will likely see reductions in their upcoming payments and, unlike home equity loans, they won’t need to refinance to secure the lower, prevailing rate as HELOCs adjust independently with no action required on behalf of the borrower. For all of these reasons, then, and with the average amount of home equity particularly high currently, right now is a great time to open a HELOC.
What about home equity loan rates?
Home equity loan rates will also fall with this latest Fed cut, but it’s unlikely to be by the same increment the federal funds rate was cut by. Still, home equity loan rates are slightly lower than HELOCs now (8.41% versus the HELOC’s average of 8.70%). And home equity loan rates are fixed, meaning borrowers who take out a loan now won’t have to worry about any future rate volatility. At the same time, they won’t be able to capitalize on any additional rate cuts that are issued, either. So borrowers will need to weigh the risks of waiting versus the low rate they can lock in now to determine which is the best option for their unique financial situation.
The bottom line
A Fed rate cut, even in a small amount, is good news for all types of borrowers, but particularly for those who have or are considering a HELOC. Still, it’s critical to remember that rates on home equity products are lower than most alternatives because the home in question serves as collateral – and you could lose it if you don’t repay all that you’ve withdrawn. So go into the home equity borrowing situation clear-eyed and focused to avoid overborrowing from one of your most critical assets.
Have more HELOC questions? Learn more here now.
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Donald Trump says he has no plans to sell DJT stock, calls for probe into “market manipulators”
President-elect Donald Trump took to Truth Social on Friday to reiterate that he doesn’t plan to sell shares of Trump Media & Technology Group. He also called for an investigation from “the appropriate authorities” into “market manipulators or short sellers,” whom executives at the company and shareholders have previously blamed for volatility in the stock, which trades under the ticker symbol DJT.
DJT shares jumped shortly after Trump’s post, gaining as much as 16% on Friday. The stock rose $3.15, or 11.4%, to $30.84 in early afternoon trading, partly reversing a 23% plunge on Thursday that had trimmed some of the company’s gains in the run-up to the November 5 election.
Trump, who is the biggest shareholder of Trump Media with a 57% stake, said the business has been the target of “probably illegal rumors and/or statements” that he said allege he plans to sell shares of the company, which owns the Truth Social platform. In September, Trump had vowed not to sell his stake after a lock-up period expired for Trump Media insiders, allowing them to sell for the first time since the stock went public in March.
Trump Media, whose DJT ticker is the same as Trump’s initials, has seen extreme volatility on Nasdaq, with its shares swinging wildly on news related to the president-elect. That has prompted comparisons of DJT with meme stocks, or companies that trade on social media buzz rather than financial fundamentals such as revenue and profit growth.
Trump’s call for an investigation into trading of the stock highlight potential conflicts of interest between his role as the nation’s chief executive and his business interests, with his holdings in the company valued at $3.6 billion as of Friday afternoon. As president, Trump will not only have oversight of many federal agencies, but will also appoint the head of the U.S. Securities and Exchange Commission, the agency that regulates the securities industry.
Although there’s no requirement that presidents sell their financial assets when they take office, most U.S. presidents have opted to put their business holdings into a blind trust, according to the Brennan Center for Justice, a nonpartisan law and policy institute.
A blind trust is managed by an independent trustee, and the president or other official who created the trust isn’t allowed to advise or consult with the trustee on business decisions.
During Trump’s first term as president, he chose not to place his company, the Trump Organization, into a blind trust, opting instead to hand over management of the company to his oldest two sons, Donald Jr. and Eric, along with its longtime chief financial officer, Allen Weisselberg. (Weisselberg was released from jail in July after pleading guilty to giving false testimony about the size of Trump’s triplex apartment as part of a civil fraud trial.)
Trump’s arrangement during his first administration was flagged by some ethics experts as problematic, with former chief White House ethics lawyer Norm Eisen writing in 2017 that it failed to resolve the conflicts of interest between Trump’s business holdings and his role as president.
Trump Media stock price chart
Trump Media has attracted short sellers, or investors who seek to make a profit when a stock tumbles. That drew accusations from Trump Media CEO Devin Nunes, a former Republican congressman, that these investors have manipulated the stock. Nunes has requested investigations by lawmakers and the Nasdaq stock market, where DJT is listed.
Because of Trump’s majority ownership of DJT stock, the stock would likely drop if he sold his shares “for any reason,” noted S3 Partners in a November 6 research note.
In his post on Truth Social Friday, Trump said he believes in Trump Media, and refuted claims that he is interested in selling shares.
“THOSE RUMORS OR STATEMENTS ARE FALSE. I HAVE NO INTENTION OF SELLING!” Trump wrote. “I hereby request that the people who have set off these fake rumors or statements, and who may have done so in the past, be immediately investigated by the appropriate authorities.”
