Not Paying Your Credit Card Bills: What Are the Consequences?
Photo BVA
Not paying your credit card bills can have serious consequences for your financial health. Below, we detail the main repercussions that this could have:
By 2001 Online
1. Damage to your credit score:
Paying late negatively affects your score.
A delay of 30 days or more can make it difficult to obtain new cards, loans, and other financial products.
Negative information remains on your credit history for up to seven years.
The higher your score, the greater the penalty for a delay.
2. Late charges:
The card issuer can charge you up to $30 for your first late payment, and $41 if you’re late again within six months.
Additionally, interest and other penalties may apply.
3. Increase in APR:
If the delay exceeds 60 days, the issuer may increase the interest rate applied to you.
This means you’ll pay more for your balance and future purchases.
Some banks offer the possibility of returning to the original APR if you make timely payments for a certain period of time.
4. Issuer warnings:
You will receive notifications after 30 days of non-payment.
The bank will offer you solutions to catch up.
Do not ignore the caller’s calls, as this will only make the situation worse.
5. Account closure:
If you do not make the minimum payments for 180 days, your account may be canceled.
You will not be able to use the card and the outstanding debt will be recorded as a loss.
The issuer can sell the debt to a third-party collector.
This will further affect your credit score.
6. Demand for debt collection:
If you don’t pay the outstanding balance in 180 days, the issuer or collector can sue you.
If you lose the case, your wages and property could be garnished, as well as interest and penalties.
Read more in 2001 Online.