Old Credit Card Balance

[Team Work]

I live in California. Roughly twenty years ago, I defaulted on a credit card balance. It was later charged off and after 7 years, it no longer appeared on my credit report. For several years after that, the company continued to try to collect the debt and I finally wrote them a letter asking them to stop contacting me and also told them that under the Fair Credit Reporting Act, they could not report anything negative to the credit bureaus. I haven't heard from them for at least five to seven years.

Currently, I have a department store credit card (with no balance, by the way) that was recently converted from one brand of card to the brand of card I defaulted on many years ago. The store just sent a letter announcing the change included a new card. I have not used this new card and am concerned that if I do, the company will be able to come after me for the 20 year old balance.

If I keep this card, will I once again become liable for this old balance?

 

[justalayman]

Doubtful unless they find some way to merge the two accounts. This new card is under a different contract so they should be considered two separate debts.

 

[Zigner]

HOWEVER, they may have a right of setoff.

 

[Team Work]

HOWEVER, they may have a right of setoff.

Yes, setoff is exactly what I'm concerned about. If anyone knows whether or not it could be applied in this case, I'd appreciate it.

 

[justalayman]

Certain conditions must be met before the firm can exercise its right of "set off".

the account from which the firm transfers funds must be held by the customer who owes the firm money.

the account from which the firm transfers the money – and the account from which the money would otherwise have come – must both be held with the same firm.

the account from which the firm transfers funds – and the account from which the money would otherwise have come – must both be held in the same capacity by the customer concerned. So, for example, if Mrs C holds a savings account in her capacity as treasurer of a local society, the firm cannot take money from that account to pay Mrs C’s personal credit card bill that she normally pays from the current account she holds in a personal capacity
.
the debt must be due and payable. For example, if a customer misses making a loan payment, then (at least until it calls in the loan) the firm can take only the missed payment – not the balance of the loan.

from everything I have read, it would not apply as there are no deposit accounts involved. It isn't that they merge the accounts but simply put; you owe us (whatever lender it is) and you have money in our bank also. We have the right to take from the one pocket and put in the other pocket that you should have.

As well, I do not believe the card brand itself would make any difference as most cards (such as Visa) are not the actual lender. They are merely a processor of transactions with individual lenders as the actual debt owner.

where's tigi?

 

[cosine]

from everything I have read, it would not apply as there are no deposit accounts involved. It isn't that they merge the accounts but simply put; you owe us (whatever lender it is) and you have money in our bank also. We have the right to take from the one pocket and put in the other pocket that you should have.

As well, I do not believe the card brand itself would make any difference as most cards (such as Visa) are not the actual lender. They are merely a processor of transactions with individual lenders as the actual debt owner.

I do know that Capital One has carried over old debts onto new credit cards when they manage to acquire new accounts from people that owe for past accounts (or manage to acquire debts owed by people that have existing accounts). I can't say if this is legal, or not, but I know it has happened at least once two years ago. And banks are more desperate today. And I don't know if they will also charge overlimit fees if the added on debt puts one over the credit limit. But I wouldn't put it past them to do that.

To the OP: close the account ASAP. Find a local credit union.

 

[justalayman]

I do know that Capital One has carried over old debts onto new credit cards when they manage to acquire new accounts from people that owe for past accounts (or manage to acquire debts owed by people that have existing accounts). I can't say if this is legal, or not, but I know it has happened at least once two years ago. And banks are more desperate today. And I don't know if they will also charge overlimit fees if the added on debt puts one over the credit limit. But I wouldn't put it past them to do that.

To the OP: close the account ASAP. Find a local credit union.

and Capitol One is the actual bank, not the card. The OP has not said the bank is the same, just the "brand of card". I read that as VISA, MC, whatever, not the actual bank.

 

[Team Work]

and Capitol One is the actual bank, not the card. The OP has not said the bank is the same, just the "brand of card". I read that as VISA, MC, whatever, not the actual bank.

Rather than being overly cryptic about it, I'll just mention that the card I defaulted on years ago was American Express and the debt was owed to them.

The account I have now was originally a "XYZ Department Store" Visa card that they automatically converted to a new "XYZ Department Store" American Express card. As I read through the disclosure, it says that they are using the American Express name under a licensing agreement, and that the card is issued and administered by "XYZ Department Store" National Bank.

I think this just answered the question. American Express is not the lender here, the card issuer is only licensing use of their name.

Doesn't this sound right?

 

[justalayman]

.

I think this just answered the question. American Express is not the lender here, the card issuer is only licensing use of their name.

Doesn't this sound right?

I believe so BUT you need to read your card member agreement.

this is from amex green card tos:

We may consider your Account to be in default if:
• you do not pay any amount when it is due.
• any payment you make is returned unpaid.
• you fail to comply with any term of this Agreement.
• you default under any agreement you have with us or
any of our affiliates.
• you give us information

If we consider your Account in default, we may:
• suspend your ability to make charges.
• cancel or suspend any feature on your Account.
• cancel your Account and require you to pay your
Account balance immediately.
• require you to pay more than your Minimum Payment
Due immediately

I think the two separate accounts would remain as separate accounts but based on the above, it is likely they could cancel your account at any time and call it due in full. That would suck if you had just charged $20k on the card.