what is a credit card charge off

A credit card charge off occurs when a lender or creditor writes off an account as a loss and closes it to future charges. This usually happens when an account is seriously delinquent, for example, after 180 days of not making the minimum payment for credit cards. However, even if the debt is written off, the borrower is still legally obligated to pay it. The lender may sell the debt to a debt buyer or transfer it to a collection agency. A charge-off is considered a derogatory remark and can appear on a credit report for up to 7 years, which can negatively impact credit scores and make it difficult to qualify for loans or credit cards. It is important to note that a charge-off is not the same as debt forgiveness or a write-off. If you have a charge-off, you can contact the original lender or the collection agency to see if it’s possible to negotiate a payment plan or settlement. To avoid a charge-off, you can contact your creditor and explain your situation, set up a payment plan that you can afford, ask for a deferment or forbearance, or consider debt consolidation or a debt management plan.