Why you should never pay off your credit card debt

Website design By BotEap.comMost people believe that credit is a good thing, but the truth is that credit is a tool used against many consumers. The problem is that the majority of the American population is broke and depends on credit to survive. Credit is debt management and most people don’t understand how to manage debt. The school system in the United States spends so much time teaching students how to live their lives robotically that they forget the lessons on managing money. Everything from employment to renting a car to booking a hotel depends on some kind of credit. Credit is for the poor who don’t have plenty of cash. This is a problem rich people don’t have to worry about.

Website design By BotEap.comThe United States is the richest country on the planet, but it has the widest gap between rich and poor. Wal-Mart’s CEO earns about $7,000 an hour, unlike cashiers and other Wal-Mart employees who earn just $300 a week. How can someone manage debt and live a comfortable life earning that kind of salary? Most people are taught to negotiate their credit card debt to settle and improve their credit. This is the biggest mistake any consumer can make. Consumers don’t know that every time a credit card company pays off a debt for $600 less than their past due balance, the card company is required by law to report it to the IRS. This is critical for the consumer to know because the IRS will ultimately send a 1099C to the consumer. The consumer will have to pay taxes on the credit canceled by the credit card company. This is capitalism and unfair at the same time. However, what can a person who is already struggling to pay their bills do to protect themselves? They can let the creditor charge the debts as a tax loss. When this happens, the creditor can no longer collect the debt.

Website design By BotEap.comMany credit card companies will continue to sell your canceled accounts to collection agencies for pennies on the dollar. Collection agencies will convince many consumers that if they don’t pay this debt, they will ruin their credit. Many consumers don’t realize that paying off a delinquent or collection account won’t improve their credit score significantly enough to help them acquire more credit. Consumers should always request a debt validation from collection agencies with complete documentation. Most collection agencies cannot provide this information and will send the consumer a screenshot of the balance acquired from the original creditor. Sometimes they will send the consumer an Affidavit of Destroyed Instrument. This simply means that they do not have the original documentation. The consumer must always respond with an Affidavit of Denial and file a complaint with the Better Business Bureaus forcing the collection agency to produce the original contract, which in most cases they cannot do.

Website design By BotEap.comThe reality of our credit-driven society is that cash is king. Credit is the whip used for modern slavery and social economic control. Until people demand change within our political, educational, and credit system, they will be forced to live their lives as intellectual and labor prostitutes for rich men and the corporations they lead.