What is an account reage?

Re-aging is the process of rolling back your credit card. If something comes up and you happen to miss a few payments, you can ask your creditor to re-age your account. If they agree, it will be just like it was before you missed the payments – no more late fees or missed payments. You will still owe them just as much as you did before you re-aged it – the missed payments aren’t just wiped out – but their effect on your delinquency is.

Re-aging your credit card sounds like a win-win for both sides – you are no longer delinquent, and your creditor gets their money. However, there are guidelines that you must follow. Re-aging is not meant to be a means to delay payment for those who cannot afford it – instead, it is meant to be an eraser for those who temporarily overstepped their budget. After re-aging, you must make three consecutive monthly payments, and you cannot re-age a new credit card. Both of these are to show that you are not just trying to delay the inevitable, but instead are truly attempting to get back into good standing. Similarly, you may only re-age an account once per twelve months. As a result, it may be better to save your re-age for when you miss a few consecutive months, rather than just when you may slip-up and miss one.

These rules aren’t to punish debtors – instead, they are to protect the integrity of the credit system. If everyone was allowed to re-age their credit cards all the time, it would be very hard to tell who is actually credit-worthy and who is not. Oftentimes, creditors may have even stricter rules than these for who can re-age – after all, the creditor must agree in order for you to re-age.

Still, re-aging is a good means of forgiveness for both the debtor and the creditor. It allows the debtor to get back into good shape and stop paying late fees, and it allows the creditor to resume receiving payments rather than having a delinquency. If used carefully and with good faith, it can be a good tool to getting back on solid ground.

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Graham Billings

Graham Billings is a senior at the University of North Carolina at Chapel Hill with a double major in Economics and Political Science. He plans to graduate in December of 2009 and then attend law school in the fall of 2010. He is a member of the Economics Club at Carolina, which brings in speakers and hosts events in order to discuss current economic issues and help those who do not have a background in economics become more familiar with it. He is a National Merit Scholar and Dean’s List recipient. He is originally from Greensboro, North Carolina and attended the Early College at Guilford for high school, taking classes at Guilford College. In addition to economics, his academic interests include the legal and political system. He headed the only student-run, high school-level Honor Court in high school and participated in a national model Congress in San Francisco, run by Harvard students, and won awards of excellence for his work on the mock Supreme Court. Additionally, he tutors Carolina students in economics on a volunteer basis.

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