Imagine that the bank hears and says that your entire credit card debt is canceled because they no longer have to offer credit cards. That was what happened in Canada but the event should be seen as an extremely unique exception. Several economists are also asking why the bank acted as they did.
When the US bank Chase Bank decided to leave the Canadian market
They chose to contact all their card customers and announce that their debts would be cleared. After issuing credit cards in cooperation with Amazon and Marriott, for 13 years, the bank chose to terminate these partnerships. Consequently, the customers who had cards through the bank could not have these. The bank then had to decide on how to handle the debts – which ended up being postponed.
In an interview with CBS, a credit card expert says that it was probably cheaper for the bank to clear these debts than to try to recover them. At the same time, there was the solution to resell the debts, which would mean that the bank in any case received something for these debts. Several experts therefore asked why the bank donated the debts instead of selling them. But the bank obviously thought it was the best option.
“We felt it was a better decision for all parties, especially our customers” / Maria Martinez, Chase Bank.
Received debts of $ 7500 aftermarket
CBC chose to interview some of the bank’s former customers, who thus had their debt written off. One of these was Paul Adamson who calculated that he earned close to $ 7500. In addition to not having to pay the debt he had on his Amazon card, he also received back the deposits that were made to the card after the decision was made by the bank that the debts would be repaid.
A clarification from CBC states that some customers may be required to pay income tax. In the case where the card was used for private use, no income tax requirement will be imposed. Those who, however, used the card within a company may have to pay tax. This is because the neglected debt can be interpreted as an income under Canadian law.