I just wonder...

I wonder. Everyone knows how deliquent credit works right? What I mean is, like, when you stop paying on a charge account, how that debt is passed along. It goes like this...

You borrow one dollar from company A. You get charged interest on that dollar, let's say 25%. For every dollar borrowed you owe one dollar and twenty five cents back. Let's say you don't pay that back and it runs over one month. Well, just from interest you now owe one dollar and fifty six cents. Let's tack on a late fee of say 10% and you now owe one dollar and seventy two cents. Company A gives up on trying to collect the dollar you borrowed and in steps company B. Company says to company A, I see that your customer owe's you one dollar and seventy two cents. I will pay you one dollar and ten cents for that debt and collect it myself. Company A says ok, deal, because they really only have one dollar worth of debt out there, anything over one dollar is profit.

Company B then tracks you down and says to you that they know you owe one dollar and seventy two cents, but it you act now they will settle this debt for for one dollar and twenty cents. One dollar and twenty cents is less than you owed to begin with so you say what a great deal and pay the one dollar and twenty.

That is the gamble that company B makes anyway. That you will pay the one twenty and be happy for it. In the percentage game there is a constant that every situation has that must be included in the gamble that a prospect is going to respond. There has to be someone, somewhere, that says No. I like to think of myelf as that constant. In sales it works like this....

When you are selling widgets, you have to get so many No responses to get to that Yes. Let's say you go out and you ask ten people if they would like to see your widget. Of that ten people, three are going to say yes, show me your widget. Of the three that check out your widget, one will buy a widget. The object in sales is to get past the No's to get to the Yes'. The way to be successful at this is to show widgets to everyone, each No brings you closer to that Yes. Company B works on the same principle. The more people they can make this offer to, the more money they can make. This is called The Law of Averages. Unfortunately, in order for this law to work, someone has to say No.

I am that No.

Now that we muddled thru the boring part, let me tell you what I wonder.

I have this credit card. It has a pretty low limit for a card, but when I got it I was supposed to use it for emergencies and stuff like that. I have had it for several years and paid on it regularly for most of that time. When the recession hit us, I had to make a choice fo who got paid what and this card came out on the losing end. I am not proud of it, I am just laying down the groundwork for the bigger questions to come later.

Ok, so I maxed this card out to it's limit, and made the tough decision to not pay on it. The company added their late fee and an over-the-limit charge and started running up the debt. Now in today's electronic age, it is near impossible to go over-the-limit on a charge card because when they run the card it will be declined. The card company can run it over in a second. They continued to charge late fees and over-the-limit charges until currently the balance on the card is twice the initial loan and credit limit.

I wonder how high the limit can go. If the card company continues to add to the balance, is this an indication of how much credit is actually available to me? I mean, the way I see it, if the beginning limit was let's say one hundred dollars, and they run it up with their charges to two hundred and fifty dollars, doesn't this indicate that they could have made the limit two hundred fifty to begin with? Given that presumption, and if history proves itself, then in theory I currently have unlimited credit with this card company. Here's where I wonder... In theory, this company has set the precendent that I can borrow as much as I want from any lender. They have given me a blank check, so to speak.

I should be able to walk into any lending institution and use their example as a means to secure any amount I choose. Hey, I didn't make these rules, they are the ones that keep rasing my limit. If it works for me, shouldn't it work for everyone?

I don't mean to sound crass or without sense of responsibility and I know you nay-sayers out there are freaking out that I can let this debt go unsettled. But, in my own defense I do have to say that the card company knew the risks before they gave me the card. Equifax can tell them all they ever wanted to know. Had they done their due dilegence, I would have never gotten the card to begin with, and I would never have been able to acrue this high of a limit.

The lady called me from the card company last week. She wanted to inform me that my payment was past due. I really did not intend to laugh thru this highly professional contact, but I did find humor in it. I asked her if it had been turned over to collections yet, and she told me that if I did not make a payment it would be. We talked about collections for a few minutes and she asked again if I would make a payment of x amount to keep the account 'active'. After doing the math in my head for a moment I deduced that I could get this card paid off for less than the actual charged amount, if I had the time to wait it out.

FICO doesn't lie. I have all the time in the world.

I told her No.