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Is Cryptocurrency Replacing Credit Cards The Changing Landscape of Payment

One of the main features of contemporary life is credit cards, which allow you to make purchases on credit and make payments over time or later. Naturally, there are penalties and charges for missing payments, and interest accrues at a rapid pace. A company gives you a credit limit and a card, and they want you to return the money according to their rules. Stiff penalties can follow for breaking the rules. For example, if you play slots that accept credit cards, you must only use cards that authorise transactions with the casino.

Rather than using cash or other conventional payment methods, cryptocurrency is a payment technique that is similar to the digital transactions that are utilised today. Although cryptocurrency was created to displace regulated and government-issued money, in its brief existence, it has found many applications.

Cryptocurrency vs. Credit Cards: A General Comparison

Cryptocurrency is not replacing credit cards in the traditional sense, but it is emerging as an alternative payment method in certain contexts. The role of cryptocurrency in the financial ecosystem and its comparison with credit cards can be understood in several aspects:

Adoption and Usage: Credit cards are widely accepted and have a well-established infrastructure globally. Cryptocurrency, while growing in popularity, is still not as universally accepted for everyday transactions.
Transaction Mechanism: Credit cards operate on a “promise to pay” model, where the card issuer pays on behalf of the cardholder, who then pays back the issuer. What kind of securing credit cards is very important here. Cryptocurrencies operate on a direct transfer model, where value is transferred directly from one party to another without the need for an intermediary.
Security and Privacy: Cryptocurrencies offer a higher level of anonymity and security (through blockchain technology) compared to credit cards, which are tied to personal information and are susceptible to fraud and identity theft.
Costs and Fees: Credit card transactions often involve fees, such as processing fees, which can be higher for international transactions. Cryptocurrency transactions may offer lower fees, especially for cross-border transactions.
Accessibility: Cryptocurrencies can be accessed by anyone with an internet connection, making them potentially more accessible than credit cards, which require a relationship with a financial institution.
Regulation and Stability: Credit cards operate within a highly regulated financial system, whereas cryptocurrencies are still in a phase of regulatory development, leading to potential volatility and uncertainty.
Innovations and Integrations: Some financial services and tech companies are integrating cryptocurrencies into their payment systems, allowing for crypto credit cards, which combine features of both.

In summary, while cryptocurrencies are not replacing credit cards outright, they are providing a new form of transaction that appeals to a segment of consumers and businesses. So far, the cryptocurrency has been referred to as “fool’s gold“, which is quite extensive. The future could see more convergence and integration, depending on regulatory developments, technological advancements, and shifts in consumer preferences.

Cryptocurrency Deals

Peer-to-peer transactions using cryptocurrency eliminate any middlemen and only involve the two individuals involved in the financial exchange. You own and manage a digital wallet where Cryptocurrencys are kept. You can designate a third party, such as an exchange, to hold your money on your behalf; but, you are not required to rely on a financial institution for this service.

Payments are “pushed” straight from one party to another without passing via a third party financial institution, much like cash transactions. A public blockchain records every transaction made through a private network of computers used for payment processing. But for as long as you’d like, you can stay anonymous.

Personal identification, like your name and address, is not required when completing a cryptocurrency transaction. This implies that no one keeps an eye on your money dealings or places restrictions on what you are allowed to do.

Transactions with Credit Cards

Through the use of financial intermediaries, a merchant is authorised to “pull” a payment from your account when you use a credit card. The credit card network, the merchant, the acquirer (the financial institution that permits payments to the merchant), the issuer (the cardholder’s bank), and the actual cardholder are, for instance, the five parties that are typically involved in a Visa transaction. The payment processor is a sixth party that might occasionally be involved, however many are also the acquiring bank.

Fees are assessed by each company participating in the transaction and subsequently passed on to the cardholder, hence increasing prices. Additionally, credit cards need to be physically kept safe and secured. Though technology is advancing, card numbers remain vulnerable to theft, particularly if you permit retailers to store them for convenient access in the future. Even if you don’t, card information can be stolen by hackers who gain access to merchant records.

Important Variations

A public key, which is an anonymous alphanumeric address that your wallet uses, and a private key are used to conduct cryptocurrency transactions. Quick response (QR) codes associated with your wallet can also be used to make payments on mobile devices. Mobile devices can also be used to make credit card purchases, however before the payment is processed and authorised, it must pass through multiple businesses.

Finality

Unlike credit card transactions, which are cancelable, cryptocurrency transactions are irrevocable and can only be reimbursed by the recipient. This implies that when businesses accept cryptocurrency payments, there are no automatic chargebacks. When a client challenges or reports a fraudulent payment, the credit card company requests that the store reimburses them for the loss. This is known as a chargeback.

Charges

The costs you choose to pay the network with cryptocurrency are entirely up to you, however the smaller your fee offering, the longer it will take for the transaction to be confirmed. In addition, network traffic, the current price schedule at the time of the transaction, and any services you may be utilising are also factors. When you start a transaction, many wallets will display the most recent fee rate or provide you the option of regular or quicker rates. On November 3, 2023, the average transaction cost was $3.92; however, by November 7, 2023, it had increased to $7.17.1.

On the other hand, credit card costs might vary from 0.5% to 5% in addition to a fixed fee of $.20 to $.30 for every transaction.

Advantages of Cryptocurrencies Over Credit Cards

Cryptocurrencies offer several advantages over traditional credit cards, which contribute to their growing popularity. Here are some key advantages of cryptocurrencies:

Security: Cryptocurrencies use advanced cryptographic techniques to secure transactions, making them highly secure and resistant to fraud and hacking. In contrast, credit card transactions can be susceptible to data breaches and identity theft. However, despite the high degree of protection, there are still instances of fraud.
Anonymity: Cryptocurrency transactions can be conducted with a higher level of anonymity since they don’t necessarily require the disclosure of personal information. Credit card transactions, on the other hand, are tied to cardholder information, making them less private.
Lower Transaction Fees: Cryptocurrency transactions often have lower fees compared to credit card transactions, especially for international payments. Credit card companies typically charge processing fees and foreign transaction fees, which can add up.
Global Accessibility: Cryptocurrencies can be accessed and used by anyone with an internet connection, making them accessible to people in regions with limited access to traditional banking services.
Quick Transactions: Cryptocurrency transactions are typically processed faster than credit card transactions, which may require approval from multiple intermediaries.
Borderless Transactions: Cryptocurrencies enable borderless transactions without the need for currency conversion. This is particularly advantageous for international trade and remittances.
Ownership and Control: Cryptocurrency users have full ownership and control of their digital assets. With credit cards, users rely on third-party financial institutions and are subject to their policies and restrictions.
Inflation Hedge: Some cryptocurrencies, like Bitcoin, are often considered a store of value and a hedge against inflation. This is in contrast to fiat currencies, which can lose value over time due to inflation.
Financial Inclusion: Cryptocurrencies have the potential to bring financial services to unbanked and underbanked populations who may not have access to traditional banking systems.
Smart Contracts: Some cryptocurrencies, like Ethereum, support smart contracts, which are self-executing contracts with the terms of the agreement directly written into code. This can automate and streamline various financial processes.
Decentralization: Cryptocurrencies operate on decentralized blockchain networks, reducing the risk of a single point of failure or control. Credit card systems are centralized and controlled by financial institutions.

It’s important to note that while cryptocurrencies offer these advantages, they also come with risks and challenges, such as price volatility, regulatory uncertainty, and the potential for misuse. Users should exercise caution and be aware of the specific characteristics of each cryptocurrency when using them for transactions.

Payment Trends in e-Commerce: The New Standard

While there has been a significant shift in the e-commerce scene recently, the COVID-19 epidemic was the catalyst that really solidified the “new normal.” After the first crises, consumers quickly adjusted to internet purchasing and developed new routines and behaviours that have lasted ever since.

Perfect Payment

In the world of online shopping, customer expectations have never been higher. When it comes to payment processing, people want flawlessness – speed, safety (also called security), and simplicity – upported by trust, interoperability, and a seamless payment process. The desire for “payment perfection” is what propels consumers to accept new payment methods, according to the FIS Worldpay Global Payments Report 2023. In this context, trust and loyalty have become essential elements that need to be present at all times during the user payment experience (UPX).

Growth of Electronic Payments

The explosive growth of digital wallets is one of the most prominent developments in e-commerce payments. With a whopping 49% of the e-commerce market share and 32% at the point of sale (POS), companies like Alipay, PayPal, and Apple Pay have amassed a whopping US$18 trillion in revenue. This domination indicates a substantial shift in customer preferences in favour of these safe and practical digital payment options. The proliferation of digital wallets is similarly noteworthy in Latin America (LATAM). The digital wallet market is very competitive, with a wide range of participants, including fintechs, banks, neobanks, super applications, and device manufacturers. This forces retailers in every consumer-facing segment to accept wallets.

Credit Cards and Buy Now, Pay Later (BNPL) schemes

Buy now, pay later, or BNPL, is expected to grow at a spectacular 16% CAGR globally through 2026, making it a sustainable growth story. The so-called “BNPL 2.0” will witness increased rivalry as other participants, such as Super Apps, Card Networks, and Banks, join the market in addition to Fintechs.

Credit cards continue to be incredibly relevant even in the face of the growing popularity of alternative payment methods; in 2022, credit card transactions will total over a whopping US$13 trillion. In both POS and e-commerce environments, the value of credit card transactions is expected to increase at a consistent 4% CAGR in the future. Furthermore, credit cards are a vital source of finance for POS financing, BNPL services, and digital wallets. Twenty-two percent of users worldwide finance their digital wallets with credit cards. This pattern suggests that even while credit card spending overall is increasing, through 2026 it is anticipated that credit cards’ proportional share of transaction value would decrease.

Cryptocurrencies and Payments in the Future

Although they are not yet widely used in e-commerce, cryptocurrencies provide a lot of room for innovation, especially when it comes to platforms that convert fiat currency (C2F). A meagre $11.6 billion of the value of worldwide e-commerce transactions was made up of cryptocurrency transactions as of 2022. However, estimates suggest that this amount is about to increase significantly, with bitcoin payments predicted to reach about $39 billion by 2026 – or just less than 0.5% of the value of all e-commerce transactions worldwide. Peer-to-business (P2B) payments using cryptocurrencies have a lot of potential, especially as more approachable and user-friendly crypto solutions are created.

The Cash Decline

The use of physical cash in payments is rapidly declining as Central Bank Digital Currencies (CBDCs) take their place. It is predicted that by 2026, cash’s percentage of global POS transaction value will fall to less than 10%. The declining importance of currency is caused by a variety of variables, and this decline is not consistent across all locations. All things considered, it is predicted that the compound annual growth rate (CAGR) for cash use will be -6% through 2026.

It’s also worth noting that many casinos are now also abandoning the use of cash. So far, the full introduction of virtual money can only be found in unlicensed casinos that do not have a UK licence.

In order to provide the finest payment solutions, businesses need to have a thorough understanding of both their markets and customers in order to succeed in the current e-commerce scenario.

It’s critical to comprehend the varying inclinations of today’s diversified e-commerce landscape. The 2023 FIS Worldpay Generation Pay Report provided interesting new information about how different age groups handle internet payments. For example, of the 805 respondents polled in Brazil, who ranged in age from Boomers to Generation Z:

Technology that allows for checkout without a ticket was desired by 49% of respondents.
Of those surveyed, 50% said they preferred biometric authentication.
43% expressed interest in using cryptocurrencies for payments.

And worldwide:

Sixty-eight percent stated they didn’t trust internet retailers.
44% anticipate using reward points as payment.
Online shopping is preferred by 50% of respondents, and different payment methods are vital, according to 67% of respondents.

These results highlight how crucial it is to customise payment options to meet the various expectations of customers across generations. As we examine the developments in e-commerce payments in more detail, it becomes evident that accommodating these diverse tastes is essential to being competitive in this dynamic environment.

In summary

In conclusion, there is ongoing change taking place in the e-commerce payments industry. Businesses need to innovate, adapt, and live up to customer expectations in order to succeed in this always changing world. In the words of author Matt Ridley, “The great human achievement is to specialise as a producer of goods or services so that you can diversify as a consumer.” Those who put this theory into practice and create innovative payment solutions and features that promote prosperity and satisfaction for customers, markets, and merchants alike will emerge victorious in the e-commerce arena. E-commerce payments have a bright future ahead of them, and businesses who are open to change will prosper in this fast-paced sector.

As for the direct fight between cryptocurrency and bank cards, things are very ambiguous so far. However, as many financial experts predict, in the next 10-15 years, cryptocurrency will become the most popular in the world (we are talking about developed countries).

3 Secret Ways To Build Your Credit Score Using A Credit Card

There are many ways that you can build up your credit score. For instance, you can look into debt consolidation loans if you’re having trouble paying back several credit cards at the same time. You might also dispute errors you find on your credit report.

However, your credit cards are one of the most crucial tools you can use to improve your credit score. We’ll discuss some ways you can do that in the following article that some people might not necessarily know.

1. Pay Back Your Bills Strategically

You probably know that if you carry a credit card balance from one pay period to the next, you have to pay interest on it. If you do that, you’re not getting anything back from that money you’re spending, so it’s something you want to avoid.

Paying your entire balance before each cycle ends, though, is an ideal way to improve your credit score. If you don’t carry a balance from one payment period to the next, that means you have a very low credit utilization ratio. Your credit utilization ratio is determined by looking at how much borrowing power your credit cards give you vs. how much you’re using.

The lower your credit utilization ratio, the better it is for your credit score. That should incentivize paying off your credit card bills on time just as much as avoiding paying any interest.

2. Get a Higher Credit Limit

If you’re working at building your credit score, you can also ask your credit card company for a higher credit limit. If you show a record of consistently paying off your balance on time, a company will probably be willing to give you one.

If you’ve got a higher credit limit and still don’t carry any balance on your card from one pay period to the next, that means you’re doing even better with your credit utilization ratio. You have more borrowing power, but you aren’t using it. That will translate to your credit score increasing.

3. Credit Piggybacking

Maybe you know someone in your family with excellent credit. They always pay their entire credit card balance and never carry it from one pay period to the next.

If so, you can ask them if they’re willing to add you as an authorized user to their account. You don’t actually have to use their credit card. That card account’s credit will be added to your credit utilization, though. Once again, you’ll have credit you’re not using.

Some people call this “credit piggybacking.” You’re using a friend or relative’s smart payment habits to improve your own credit score.

Credit Cards Can Help Build Your Credit Score

If you’re selective about how you use credit cards, you can utilize them as tools to build up your credit score. You might use credit piggybacking by getting someone with good payment habits to put you on their card account. You don’t have to use their card, but their account’s credit will improve your credit utilization ratio.

You can also attain a better credit utilization ratio by asking for one of your credit card companies to extend your credit limit. That means you have more credit available that you’re not using, which will cause your score to rise.

You can also pay off your entire credit card balance every pay period, so you don’t carry anything over to the next one. That will keep your credit utilization ratio low, and you won’t have to lose any money to interest payments either.

Credit cards can help you raise your credit score slowly but surely if you follow the steps we’ve laid out.

Using Credit Cards for Everyday Purchases: Wise or Dumb?

According to Investopedia, mortgages are the most common type of debt consumers carry, but credit cards seem to be the most problematic when making plans to pay off debt. They generally carry the highest interest rate and they’re “revolving debt” that changes frequently if you don’t monitor and control your credit card spending.

Does that mean it’s dumb to use credit cards for everyday purchases? Not necessarily.

The Wise Side of Credit Cards for Everyday Purchases

There are instances where credit cards protect the buyer from fraudulent charges after the initial purchase. They’re also good for ensuring you can stop payment if the merchandise you order is defective or was falsely presented. Other points on the “wise” side of this are:

• Maximizing Rewards Points: Most credit card companies have rewards programs that offer discounts and/or free merchandise for using your credit card. When used wisely, these rewards can add up, especially when it comes to travel expenses.

• Increasing Your Credit Score: You can’t build a good credit score without having and using credit. Responsible use of credit cards for daily purchases, combined with making monthly payments on time, can increase your FICO credit score.

• Eliminating the Need to Carry Cash: Cash is nice to have. The dangers to it are a tendency to overspend and the risk of theft. Using credit cards instead of cash can help eliminate both problems when you do it responsibly. Keep a few dollars in your wallet—leave the rest in the bank.

• Purchase Tracking: According to CNBC, consumers spent $900 billion more online in 2020 than they did in the two years preceding the pandemic. Using a credit card for those purchases helps consumers track their spending better.

The Dumb Side of Credit Cards for Everyday Purchases

Take each of the “wise” reasons for using credit cards for daily purchases and there’s an equally “dumb” reason not to. While credit cards can protect you from fraud, they can also open you up to it. Just ask anyone who’s had their credit card number stolen. The more you use your cards, the more likely that is to happen. Here are a few more reasons in this category:

• Danger of Overspending: It’s easy to fall into the trap of thinking credit card spending isn’t “real money” because you don’t have to pay it back right away. Having high credit card limits doesn’t help. Consumers will often spend money they don’t have.

• Restrictions on Smaller Purchases: Some brick-and-mortar retail stores have minimum purchase requirements before they allow you to use a credit card. This is common with smaller merchants, like variety stores, who try to avoid credit card processing fees.

• Large Balances with High-Interest Payments: This is the best argument on the dumb side of this equation. Using your credit card instead of cash or a debit card means that you’re accumulating a balance, which you’ll have to pay interest on if you don’t pay it off right away.

• Cash–Only Merchants: Some merchants don’t take credit cards at all. These are rare in an increasingly cashless society, but they exist. Check for this policy whenever you shop or eat someplace new. You don’t want to get stuck at checkout with no means to pay.

The Bottom Line: Wise or Dumb?

The glass isn’t half empty or half full. It’s both, and neither at the same time. In other words, this is purely a situational question. There are certain times when it’s a good idea to stick to using your credit cards, if you pay your balances in full every month. It’s also recommended that you carry at least some cash in case you need it.

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About The Author

Kevin Flynn

Kevin is a former fintech coach and financial services professional. When not on the golf course, he can be found traveling with his wife or spending time with their eight wonderful grandchildren and two cats.

Can I use my Credit card to Buy Cannabis Online?

Cannabis might be legal in your state, but does that mean you can purchase it online using a credit card? Surprisingly, there are two answers to this question. First, some marijuana dispensaries claim that they accept marijuana credit cards. However, according to industry experts, some credit card networks don’t process transactions for marijuana purchases.

Do all the Online Marijuana Dispensaries accept credit cards?

In fact, more than 80% of middle age Americans have a credit card. 70% of consumers prefer card payments (both debit and credit) more than cash. And only 10% make all their purchases without card. It’s obvious why a lot of dispensary owners really want to accept cards. Just like cardholders, who want to evaluate the effects and health benefits of marijuana.

Not all dispensaries accept online payment methods due to the volatile nature of cannabis banking. The current federal laws have limited the power of most dispensaries, making it hard for them to receive payments from credit cards. However, at weed-seeds.com, you can utilize your card and buy their quality marijuana products as long as you set up your mesh account, deposit money, and pay for your Seeds securely.

Thus, cash is the most common form of payment widely used in most cannabis dispensaries. Due to this phenomenon, cannabis businesses and dispensaries find themselves in a challenging situation, holding large amounts of cash.

Despite this, there are those dispensaries that accept credit or debit cards for cannabis payments. Yes, you can purchase Future 1 Strains using your credit card at one of these dispensaries.

However, since not all credit card companies support cannabis businesses or dispensaries, most businesses find workarounds, such as opening a shell company or using different merchant codes. This way, cannabis users can make marijuana purchases using credit cards but via third parties and also you can cure your dental health. While it is challenging to make payments using credit cards, the debit method serves as a more straightforward transaction processing method. In this system, a customer authorizes a cash withdrawal from their account. The dispensary will then be left with the withdrawal receipt.

How Can I Safely Purchase Marijuana Online?

Online and store purchase of marijuana is as simple as any other purchase. You start by locating your most preferred online shop, identify the product you want to buy, add it to your cart, and complete your purchase. However, it is remarkably different when it comes to filling in your credit card information.

Most cannabis establishments rely on third parties to process credit card payments; you should be extra careful with who you share your banking credentials. And to avoid security risks and other penalties, you should consider using an e-transfer.

Mostly, e-transfers are pretty straightforward, but the process will vary slightly depending on the criteria of the online dispensary that you choose to shop from. The simple steps include:

1) You first sign in to your mobile banking financial institution and click the send money option.

2) You start by selecting the account that you will use for your online fund’s withdrawal.

3) Identify the relevant information needed by the shop that you will be making your purchase and payments.

4) Fill in the total amount of money you are willing to spend for your purchase, and hit the submit button.

5) After a successful purchase, wait for some minutes for a confirmation report that your e-transfer was a success. In case you don’t receive a confirmation report, contact the shop to confirm your purchase.

However, you should know that you cannot use this process to purchase marijuana services if you reside in a state that has not legalized marijuana sales.

The Risks of Online Purchasing Using Credit Cards

Most experienced customers and patients know that it is sometimes challenging to make legal marijuana purchases using credit cards because most banks and credit card companies are regulated by state and federal laws governing the cannabis industry. At the national level, recreational cannabis remains illegal despite some states legalizing it.

Another risk of purchasing marijuana online is that your account might get closed. Many recreational marijuana dispensaries have a strained relationship with credit unions and banks as they might close their merchant account at any time, sometimes even without warning. Moreover, reports from the credit card union show that VISA does not support marijuana purchase transactions. However, there is news that some new mobile apps will help credit card cannabis purchases.

Systems that Allow The Use of Credit Cards

One of the apps that facilitates the purchase of marijuana online using a credit card is the KindPay app. This app will enable consumers to purchase cannabis products using their Mastercard, Visa, Discover cards, and other banks’ debit and credit cards. The app operates as a closed-loop system powered by the Herring Bank. The app is expected to be a game-changer that will dictate how people spend on cannabis.

Another app that allows online purchases of cannabis using credit cards is BlazePay. This online payment platform supports debit card and credit card processing through integration with the Retail Point Sale platform. This payment method is efficient because it helps authorized PIN-based card transactions. Dispensary customers can thus use their credit and debit cards to purchase cannabis.

Customers greatly benefit when marijuana dispensaries accept their credit cards. Customers who use electronic payment forms tend to make more visits to these businesses because their purchases are not limited to the amount of cash in their wallets. However, it is essential to consider your privacy.

Why Should I Consider My Privacy?

According to the Privacy Commissioner, the buyers and sellers need to be educated on the potential risks if their transactions are no longer private and involve third parties. One is likely to face the consequences of the banking statement falling within a jurisdiction where marijuana sales are illegal.

According to the privacy commissioner, people should know that cannabis sales and consumption are illegal in some states within the US. Therefore, individuals are advised to take security precautions to protect personal information. The main point is to protect banking information when making online marijuana purchases generally.

Final Thoughts

One of the most significant progress attained by the cannabis industry is in the banking and processing options. The Secure and Fair Enforcement Banking Act was passed by Congress in May 2017. The act is likely to prevent banking institutions from facing penalties for facilitating illegal cannabis sales. The bill protects banks that work with legal cannabis ventures from any disadvantages. The act is likely to provide a more comprehensive solution to business ventures if passed.

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What to Do if You’re Contacted About an Old Debt

Debt collectors have a finite window within which they can pursue legal action to induce payment of an obligation. The exact time period varies from state to state, as well as by the type of debt. However, a debt collector cannot sue you to collect a time-barred debt.

Now, with that said, the clock starts running again if a collector can get you to acknowledge responsibility for the debt, whether verbally or by getting you to send any payment at all toward it. This is why it’s important to understand what to do if you’re contacted about an old debt.

Zombie Debt

This type of debt is known as zombie debt because it can come back to life if you’re not careful when someone comes after you about it. There are individuals out there who buy up old debts from banks and credit card companies for next-to-nothing to use as bait to go fishing for dollars.

These people are well aware your obligations regarding the debt have passed, particularly if it’s old enough to have also dropped off of your credit history. However, they also know some people can be frightened into paying up just the same.

And, that’s exactly what they’re counting on.

The Statute of Limitations

As we mentioned above, collectors have a finite window within which they have the right to take you to court to secure a judgment in the event of an unpaid debt. This interval is defined by the statute of limitations in each state for each particular type of debt. Far too many people are unaware of this and get startled into payment when contacted about a “time-barred” debt (one upon which the statute has elapsed).

While it is true one does still owe any unpaid debt, as these Freedom Debt Relief reviews illustrate, there’s little reason to pay it if it is no longer reflected upon your credit report, other than the desire to do the right thing.

The Safest Response

Any time someone claiming to be a debt collector contacts you, tell them you have no recollection of such an obligation, and they’ve called you at a bad time. Express your willingness to get to the bottom of the situation — again — without taking ownership of the debt. Ask them to call you back at a time you choose. Make sure the time you set gives you ample opportunity to download an application that will give your phone the capability of recording calls.

During the Call

Begin by asking their permission to record their voice. Tell them you cannot accept the call unless they agree to have it recorded, if they refuse. Listen to what they have to say quietly and politely. Admit to nothing and deny any recollection of the debt once they’re done. Further, do not agree to supply them with any information about yourself — at all.

Ask them to send you — in writing — all records they have pertaining the debt. Tell them you want to know the current balance due and how much of that amount is fees, penalties and interest. Ask for the original amount of the obligation, as well as when the last payment was made on the account. You’ll also want to know where the debt was initiated (what state) and what type of debt it is. Request also the name of the original creditor, as well as the original account number.

They will likely ask you to request that information in writing. Ask for the address to which that correspondence should be posted. Send it by certified mail within 30 days, return receipt requested. Then ask them to refrain from contacting you until they have written proof you’ve received the requested information.

The Consequences

In many cases, all they’ll have is an account number, an amount and a name on a spreadsheet. Requesting detailed information is usually enough to get the nefarious ones to move on to the next name on the list.

The most important thing to remember is they’re probably recording the call too. You’ll restart the clock and they can pursue legal action against you to make you pay if you admit to owing the debt. If the debt is old enough to be time-barred, but young enough to be reflected on your credit report, you might want to pay it — or you might not — depending upon your personal circumstances. The best play here is to consult an attorney for advice.

Whatever you eventually decide, the key thing to remember to do if you’re contacted about an old debt — or any debt for that matter — is to challenge every call you get from someone claiming you owe money.