Most people in the Tampa area have at least one credit card. In fact, it is estimated that every American has an average of 4 credit cards. But sometimes there are circumstances in which a person can’t make their credit card payment for whatever reason. They may wonder what happens if they don’t pay their credit card bill.
Even one missed credit card payment can be met with consequences.
The first month
If a person misses a credit card payment, they will be assessed a late fee. The interest rate may also increase. A credit score could also be impacted because on-time payments are the most important factor in a person’s credit score.
Two to three months
If a person misses more than one month’s payment their account will be reported to the credit bureaus. This can remain on a person’s credit report for 7 years. The card issues will also block the card owner from making any new purchases. There will also be late fees added for every month a payment is missed. The interest rate may go as high as 29.99 percent and credit card companies will start making phone calls to see when they will be getting paid.
Four months or more
By this time the credit card company will charge off the debt and send it to a collection company. A person will now have to deal with a collection agency and not the credit card company. Having a charged-off debt can be disastrous to a person’s credit score and can make it nearly impossible to get more credit such as loans, applying for rentals, etc. The IRS will also notify a person that they need to pay taxes on the charged off debt.
A legal professional who is skilled in bankruptcy can help their client through this stressful time. They can give their client options for how to handle this debt and whether bankruptcy can be the fresh financial start that they need.