Credit card companies don't like to waste time when it comes to collecting past due bills. If you miss a credit card payment, expect to hear from your credit card company within a few days. After a 30 day delinquency, credit card companies will step up their efforts, and your credit will suffer for it.
Contact From Credit Card Company
Each credit card company has its own policy for collecting newly past due accounts. If you miss a payment, you can probably expect a letter, email or phone call from your credit card issuer reminding you to pay your bill. The contact increases as your bill becomes more overdue. Eventually, your account may be turned over to your credit card company's in-house collections department for more aggressive contact. Your credit card company may also decide to raise your interest rate, costing you big money over time.
Credit Reporting
Once your account is more than 30 days overdue, your credit card company reports this fact to the credit bureaus. This can damage your credit as well as raise your interest rates on other credit cards. Some credit card companies monitor your credit reports and scores: If either takes a hit, you can lose your low rate even though you've never missed a payment on their card.
Charge-Off
After six months of no payments, federal regulations require your credit card company to "charge off" your account. The card company writes off your account as a loss, which may be reported as taxable income for you. It also reports your charge-off to the credit bureaus. Charge-offs are one of the worst things you can have on your reports. Finally, your account will likely be turned over, or sold, to an outside collection agency.
Collection Agencies
After your credit card company turns your account over to a collection agency, its debt collectors will start calling you about the debt. Collection agencies can be more aggressive than credit card companies about collecting debt, so be prepared to hear from its debt collectors, both at home or at work, on a regular basis. Some collection agencies will settle your account for less than you owe, or offer you payment arrangements. If the collection agency actually bought your credit card debt, it may file a lawsuit against you.
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