What happens if you don’t pay your credit card debt?
The consequences of failing to pay off your debt are ultimately financial ruin. If you can’t afford it, don’t buy it on credit.
Failing to pay your credit card debt can have serious implications. Late payment fees and increased interest rates are common penalties, making your debt more expensive. Your credit score will be negatively impacted, affecting your ability to obtain credit in the future.
🇺🇸 United States debt
— The Spectator Index (@spectatorindex) June 18, 2023
Government debt: $32 trillion
Household debt: $17.1 trillion
Mortgage debt: $12 trillion
Auto loans: $1.6 trillion
Credit card debt: $1 trillion
These issues pale in comparison to the ultimate consequence of financial ruin. In effect stealing money from banks will lead to them pulling out all the stops to recover it, including court-issued documents allowing them to seize expensive items, cars, and even your house.
Possible and likely consequences of failing to pay credit card debt
Credit card companies will charge a fee if you miss your payment deadline. This fee can vary depending on your credit card terms and the amount overdue. This will keep expanding until you pay the debt off, making repayments crucial before the debt spirals out of control.
Moving to ban excessive credit card late fees.
— Elizabeth Warren (@ewarren) June 20, 2023
Capping insulin at $35/month for seniors on Medicare.
Pushing to cancel student debt.
This is all part of how we’re fighting to put money back in people’s pockets and put government on the side of working people.
Future debts will be affected by an increase in your interest rates. Credit card companies will raise your interest rate significantly, making your debt more expensive to repay. This is also linked to the harming of your credit score. Your payment history is a crucial factor in determining your creditworthiness, and late payments will lower your credit score, making it harder to obtain credit in the future. Lenders will view you as a higher risk borrower, leading to limited options and higher interest rates for future credit applications.
Consistently failing to make payments could mean the credit card companies could employ collection agencies to recover the debt. These agencies may contact you through letters, phone calls, or even legal action. They may file a lawsuit against you to recover the outstanding debt. If the court rules in their favor, they may be able to garnish your wages or seize your assets to satisfy the debt.