What Happens If I Don't Pay Off My Credit Card Debt Punctually?

By Author: J.J. Yong
Total Articles: 963
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For people who have just lost their employment during economy crisis, they may find it difficult to pay off their credit card debts on time, especially for those who have no savings. Having a big sum of outstanding balances on your monthly statements is indeed stressful. Life will become more challenging when a person fails to make monthly minimum payment to his or her credit card accounts.

What will happen next? You will have to "face the music".

Effective from 22nd August 2010, the Federal Reserve Board has implemented the Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. Under the new rule, if a cardholder has dragged his or her credit card payment for the first time, the bank or the card issuer can only charge the cardholder the penalty with the amount of not more than $25. However, if the cardholder has more than one late payment in a 6-month period, the late fee can be increased to $35 for every subsequent late payment. If you don't make your payment punctually, you are required to bear most costs every month. In other words, your financial burden will definitely be increased ...
... if you don't take any action on your debts.

Besides suffering from the high late fee charges, you need to bear in mind that your credit score will be badly affected too when you fail to make your payment on time. When you fail to repay the minimum payment punctually, your card providers or lenders will report to the major credit bureaus. As a result, there will be negative items shown on your credit file and your credit ratings will be reduced.

To most of the credit card holders, the most difficult part is they need to face the debt collection process every day. When you have dragged your payment for a certain period of time, your creditors will definitely send you reminder letters to chase for payment. When there is no response from you after a few reminder letters, the creditors may contact you to ask for payment through phone. After 3 months time, if the creditors still don't receive any news from you, they normally sell your accounts to the debt collection agents. These agents usually use very aggressive tactics to chase for payment. Do you think you are able to handle their collection strategies properly?

After going through the possible consequences above, I would like to remind you to pay extra attention on your outstanding balances. You must make sure that you don't pay your bills late.
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