To Get New Credit Card: Pay Off Expired Debt?

Americans burdened with old debt and low credit ratings are getting an unlikely offer in the mail: a new credit card. But the fine print explains that accepting the card means reviving debts that had expired by law, the Wall Street Journal reports. For one New York deli owner, the debt transfer was "totally worth it" because he felt "like dirt" without a credit card, particularly on dates. To get his new plastic, he paid $400 on a seven-year-old debt that, yes, was expired. Others say the practice is deceptive and illegal.

Federal and state authorities have clamped down on CompuCredit, a leader in the business, for deceptive practices. But banks that team up with debt collectors say the debt-transfer cards—usually MasterCards—allow people to revive their credit ratings. Banks also benefit from the cards' fees and higher-than-usual interest rates. One Pennsylvania woman says she read the offer three times before rejecting it: The "legal hogwash" confused her, she says. "I am just grateful I didn't accept it." (More credit card stories.)