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Watchdog says South Carolina cardholders deserve more rights

If a consumer has a dispute with their credit card company, that dispute may need to be resolved in arbitration. While arbitration clauses are common in credit card agreements, roughly 75 percent of consumers don't know that they are in their agreements. Of those who were aware that they could possibly go to arbitration, 50 percent were wrong as to whether or not their credit card agreement included such a clause.

Furthermore, only 7 percent of consumers know that this limits their ability to take legal action against credit card companies. As many as 80 million credit card users may be covered by arbitration agreements, which may enable credit card companies from blocking class-action lawsuits. Although credit card companies say that they wouldn't block an individual lawsuit from going forward, the process tends to be more favorable to creditors as opposed to consumers.

In 1,060 arbitration claims heard in 2010 and 2011, consumers were awarded less than $175,000 in damages. Conversely, credit card companies were awarded $2.8 million from consumers with most of the cases involving disputed debts. Despite the fact that credit card companies claim that arbitration is better for customers, there is no evidence that consumers saw lower costs or lower interest rates.

Those who are having trouble with credit card debt may wish to talk to a bankruptcy attorney about their options. An attorney may be able to explain the differences between Chapter 7 and Chapter 13 bankruptcy in addition to which one may be best for a given situation. In the event of a Chapter 7 bankruptcy, it may be possible to have credit card debt discharged in a matter of weeks or months. After the debt is discharged, creditors generally have no further right to pursue it.

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The Huggins Law Firm, PA

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