What is a charge-off?
The Bankrate.com financial term of the day is: "Charge-Off."
With a charge-off, a credit card company or other lender effectively says, "That's it -- we give up!" The lender accepts that an outstanding bill will never be paid and puts it on the books as a bad debt. The borrower receives a seriously negative mark on his or her credit report.
A charge-off is a creditor's declaration that a debt won't be repaid. The debtor's credit record takes a serious hit as a result.
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