Accrued interest and late fees: When you miss a repayment for the first time, the credit card companies are empowered to charge late fees up to $25. This fact is mentioned in the Credit card Act of 2009. It is under the rights you have. This late fee gets added to the credit card balance and it becomes subject to interest rates as well depending on the APR. If you miss two payments (for 60 days) the interest will rise to a higher penalty APR. T

FTC Consumer Information

he issuer of the credit card will not decrease the interest rate for six months. Finance charges and late fees will keep on increasing the monthly payments thereby making things even tougher to catch up.

More collection efforts from the creditors: The creditors are going to start contacting you for making attempts to get you to pay for the debt. They will keep on contacting you regularly. The longer it takes to repay the debt, the more frequently you are going to hear from the creditors and their billing sections. However, these debt collectors have to abide by collection laws under the Fair Debt Collection Practices Act by FTC. For example, they are not allowed to call you at unearthly hours. Consumers can request the creditors to stop calling them.

Dropping credit score: In case you miss a credit card repayment in 30 days, you can expect the creditors to report the matter to the 3 top bureaus viz. Experian, TransUnion, and Equifax. As your payment history is 35% responsible for deciding your credit score, this means your credit score is going to drop. In case your account goes to the Collections section it will be considered to be serious delinquency. Having a lower credit score makes it tough to obtain a credit card, get a loan, and even land a job. It will also lower your possibility of an approved mortgage or lease.

Your account might go to the collections section: After you have become late by 180 days, your creditors will normally charge off the debt and sell the account to a collection agency. Keep in mind the “charge off” doesn’t mean that your debt is going away. You are not only still responsible for the repayment but you can expect an addition of interest and fees to the account. These charge-offs will remain on the credit card report for around seven years. But the original debt collectors or creditors can also sue you for the debt before all the limitations expire.

Some other implications of non-payment

Can you go to jail for not paying the debt? Although there is no prison for debtors in the U.S., if some creditor sues you and wins the argument in the court of law, he might be able to garnish your wages or even get a lien on your house. If you move abroad with debt your creditors can send your account to the collections department or even file a lawsuit against you. In this case, they may opt to go after the assets that you have left behind. Keep in mind that your credit card debts will not disappear after your death. Although the late fees will no longer be charged, they can use your standing assets such as a house, car, and bank accounts.

One of the key factors while deciding your credit score is whether you have repaid the credit card debt on time. Missed and late credit card repayments will decrease the credit score. This will stop you from getting loans and other credit cards with lower interest rates and better overall terms. If you live in Pinellas County, FL area get in touch with Super Credit Repair for advice. If you have incorrect late payment entries on your credit card report, these services can help you with the removal of these entries.

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