It’s a common question among people, “Why pay my credit card bill?” when they have amassing credit card debt. If you have the same question in your mind, then it will last only for next few months that you will be having some extra cash in your pocket, but then you will definitely face major repercussions.
If you decided to be delinquent on your monthly payments then you will face:
1 – Calls from Creditor
The worst thing which you will face is the continuous calls from the creditors demanding for their money. Usually collectors make calls 8 to 10 times a day, on your cell phone, home and also at work. This is about the collectors who follow the rules. The creditors will speak to your boss, neighbors and family members though it’s illegal. And if they get you on phone then they will exert a psychological pressure on you to pay back their money. In simple words, they will do everything to make you pay them their money.
Keep one thing in mind that your rights are protected by the Federal Trade Commission. For more information about right protections, consult Fair Debt Collection Practices Act.
2 – Your Credit Score will be damaged
Creditors will report missed payments to credit bureaus, which will affect your credit score. This issue can only be resolved on settlements or when payments are made.
3 – Increase in Interest and Late fees/Over-the-limit fees penalty
It’s not like that when you don’t pay, the interest will stop accruing. The moment you go delinquent, many creditors at the very first, will raise your interest rate to the highest possible interest rate which is about 30%. They will charge you late fee penalties ranging $30 to $50 and if you exceed your credit limit, they will be happier so that they can charge over-the-limit fees.
4 – Legal Action
Legal action is the last option for the creditors when the debt becomes very delinquent. This action results in liens, garnished wages or any other legal judgments that require you to pay the debt. Anyhow this process usually takes time, that’s why mainly companies try to avoid this. But it does happen when the case is at crucial stage.