Does a life of screening telephone calls and stressing out over job and apartment rental applications sound like fun? All this and more could be in your future if you choose not to pay your credit card. And it is almost certain if you default on multiple cards. Simply put, credit card debt collectors can make your life rough.
Just the Beginning
If you decide to skip a credit card payment or fall slightly behind, the consequences might not be all that dire. Credit card companies typically charge a late fee, of about $30 in most cases, when you miss a payment. Once 60 days goes by, though, they begin calling you from their internal call center seeking payment, according to debt experts at Loan.com. The further this process drags on, the more likely your debt will be sold off to an outside debt collection agency. The late fees continue to pile up each month. If you are over your credit limit, you can be penalized monthly for that as well. Let the dings on your credit report begin.
Collection Activity
Although government regulations place restrictions on debt collection practices, Bankrate.com debt adviser Steve Bucci claims that calls from debt collection companies can feel like harassment. They will call, and call often, attempting to get you to pay in full, in part, or on some sort of payment plan. Debt collectors earn commission on money they take from you. They are often pushed hard by their superiors to get people to pay, so they can be aggressive, according to Buffalo News reporter Fred Williams, who posed as a debt collector and wrote a story for Kiplinger's Personal Finance Magazine. If you don't pay up, according to Bucci, you can be sued in civil court, which can lead to wage garnishment.
Long-term Consequences
Bucci points out other consequences of defaulting on your credit cards that you might not consider when ignoring your debt. He notes that employers often use your credit report as a way of evaluating you for a job or promotion. Landlords also pull your credit report before approving your application to rent an apartment. The more debt you blow off and the longer it goes on unresolved, the worse the impact on your credit rating. Loan.com notes that credit card defaults stay on your credit file for seven to 10 years.
Fighting Back
"The New York Times" notes that in response to the financial bailouts of 2009, some Americans decided to stop paying credit card bills instead of struggling to make ends meet. These individuals feel anger at not being bailed out like big corporations. While you will still face the above-mentioned consequences, others are on your side, including the federal government. In 2009, Congress passed legislation cracking down on unfair practices by credit card companies. You still have to pay your bills--and companies can come after you if you do not--but tighter regulation of fine print and how banks charge fees and interest on credit cards now exists.
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