What does pennies on the dollar mean?

Question

I have always heard it in movies but they move on too fast for me to process it.

In: Other

Answer 1

A good example would be that there are certain companies that buy debt at pennies on the dollar, so they’ll pay $200 for a $1000 credit card debt (essentially 20c for each Dollar), then try to recover $500 of the $1000 debt, thereby making $300 profit on what they paid.