What can happen if I don't pay for my credit card?
Not paying your credit cards may affect your credit score, but depending on your situation, you may be able to take matters into your own hands before they escalate.
Remember that not all banks use the same procedure when a payment is late.
What can happen if you miss a payment on your credit card?
It's unlikely that a single missed payment will affect your credit score, but the decision rests with your credit card provider.
The interest charge will apply immediately to all your purchases, and it is also possible that the interest rate on your card will increase. Remember that a missed payment is considered any amount less than the minimum payment, so if you can at least pay that amount, you are not in such a bad position.
If the missed payment was an honest oversight, contact your bank and explain the situation.
If you have a history of missed payments, your bank could send your file to credit reporting agencies.
What can happen if you miss two credit card payments?
An immediate drop in your credit score from 60 to 100 points is possible as credit card providers consider two consecutive missed payments as a wake-up call. Your interest rate will probably go up (depending on your provider), but it's this instant blow to your credit score that should worry you.
Creditors take your credit score into account to determine what level of risk is associated with lending you money. The lower your score, the less likely you are to get a low-interest loan in the future. If you are planning to get a mortgage one day, or apply for a car loan, it would be best to make sure your credit score is good.
Because an alert is placed on your account when you miss two payments, your credit card provider's internal collection team (or an external team) will contact you to remind you that if you do not make a payment, your account will be sent to a collection agency.
If you are still facing a financially difficult situation, it is worth asking if there are other solutions to settle your debt (e.g., a lower payment previously negotiated). What happens next is entirely in the hands of your creditors, which is why it's important to always keep the lines of communication open with them.
What can happen if your account is sent back?
Credit card companies often use external sources for certain collection activities while the account is still on their books. It is only after they have failed to recover the money due that they officially sell the debt to a collection company.
These agencies are not usually as polite as banks and will make every attempt to recover what you owe them. They are known for constantly calling people at home and at work, which can affect your personal life.
It's never a good idea to ignore your credit card bills. By being proactive and dealing with your debt, you may be able to avoid any long-term consequences.