When someone confiscates a credit card, he holds on to it so the person using the card can't charge anything to it anymore. This could happen because of suspicious activities related to the credit card, bankruptcy or debt. The meaning of confiscating a credit card varies depending on the situation and context.
If someone makes a payment at a retail store with a credit card, the store employee usually uses a machine to process the card. If the card has been reported lost, stolen or related to other illicit activities, the credit card machine may instruct the employee to call the credit card issuer. The employee can also decide to call the credit card issuer even without being instructed by the credit card machine if the credit cardholder acts suspiciously.
Calling the Credit Card Issuer
The employee can call the credit card company during the transaction or after the customer leaves. He may use the term "code 10" to avoid arousing the credit cardholder's suspicions. During the call, the operator from the credit card company asks several yes-or-no questions and may ask the employee to confiscate the credit card. The employee may then cut the credit card to prevent further use and send it to the credit card company. The employee can choose not to confiscate the credit card for safety reasons.
If a person declares bankruptcy, particularly a Chapter 13 bankruptcy, the court may appoint a trustee to supervise his finances for three to five years. To ensure that there is enough money to pay the creditors, the trustee may help the person declaring bankruptcy minimize his debts. He may do this by confiscating credit cards, preventing the person declaring bankruptcy from accumulating even more debt.
If a person racks up more debt than he can afford, he may eventually seek help from a debt counselor to get his finances in order. If he is a compulsive spender who accumulates plenty of credit card debt, the debt counselor may decide to confiscate his credit cards to prevent him from charging even more on the cards. This helps him reduce his expenses so he can eventually pay off his debts.
- University of California Santa Cruz: Card Present — Code 10 Calls
- "The New Bankruptcy: Will It Work for You?'; Stephen Elias; May 2009
- Bankrate.com; A Tough Love Approach to Debt Reduction; Blake Eligh; January 2008
- Federal Trade Commission. "Credit Card Accountability Responsibility and Disclosure Act of 2009," Pages 15-16. Accessed Aug. 27, 2020.
- Consumer Financial Protection Bureau. "§ 1026.51 Ability to Pay." Accessed Aug. 27, 2020.
- Consumer Financial Protection Bureau. "How Do I Get a Copy of My Credit Reports?" Accessed Aug. 27, 2020.
Edriaan Koening began writing professionally in 2005, while studying toward her Bachelor of Arts in media and communications at the University of Melbourne. She has since written for several magazines and websites. Koening also holds a Master of Commerce in funds management and accounting from the University of New South Wales.