Can I Get in Trouble for Not Paying Back My Credit Cards?

When you don't pay back your credit cards, you are not honoring a legal contract that you have signed. While it is not a criminal offense, it is a civil matter and can cause legal trouble. You will not be put in jail for failing to pay your credit cards, but you should be aware of the problems that not paying will cause.

Higher Interest Rates and Fees

If you do not pay your credit cards, the interest rates will go up. Not only are you not reducing your balance by paying on the account, the interest charges are driving the balance even higher. Default rates on some credit cards can be as high as 32 percent. The late fees and over-the-limit charges compound the problem. The bill does not go away; it grows exponentially.

Difficulty in Getting a Job

Many employers perform credit checks on candidates for jobs or promotions. When the employer sees late credit card payments or defaults on your credit report, it may make him decide to look for someone else. Some companies view poor payment history and default as character issues that could affect a person's job performance and decision-making ability.

Phone Calls

When you default on a credit card, the company will begin calling you within days, sometimes even hours. Most credit card companies use autodialers, and these are programmed to call you constantly, as often as every few minutes. You will not want to talk to the person on the other end, so you may stop answering the phone. So they will call you at work, and may even begin to call relatives and neighbors trying to get in touch with you.

Legal Action

Eventually your delinquent account will be sold to a collection service. The service will continue to call, becoming more aggressive in an attempt to coerce you into paying the bill. If these attempts fail, the collection service may eventually file a lawsuit against you to try to get a judgment. You will probably lose the lawsuit, as it is difficult to defend a credit card default. Once the collection service obtains the judgment, it will probably pursue a wage garnishment. Depending on the state that you live in, your employer may be ordered to withhold up to 25 percent of your pay and send it to the collector. The collection service may also place liens against assets, including savings and checking accounts that you own.