Month after month, you receive your credit card bill. It\u2019s stressful because you can\u2019t pay it off\u2026 and you start to wonder, \u201cWhat would happen if I just stop sending in payments?\u201d<\/p>\n
If you\u2019ve ever been in this situation, read on!<\/p>\n
The short answer is that a lot<\/em> of negative things will happen. The consequences will impact your financial situation for many years to come.<\/p>\n Consequence #1: Finance Charges<\/strong><\/p>\n If you\u2019ve ever missed a payment or paid it late, you know that your credit card company is quick to charge a late fee\u2014especially if this isn\u2019t your first time. The late fee is a one-time charge incurred each time you blow past your due date.<\/p>\n Consequence #2: Penalty APR<\/strong><\/p>\n In addition to the one-time late fee, many lenders will increase your annual percentage rate (APR) once your account is 60 days past due, typically after you\u2019ve missed two payments. This leads to more interest accumulating on your revolving balance at a higher rate.<\/p>\n Consequence #3: Long-Term Penalty APR<\/strong><\/p>\n The worst part about facing a penalty APR is that it isn\u2019t a one-time penalty. You\u2019ll continue to be assessed this higher APR even after you pay your bill. This higher rate usually stays in effect until you\u2019ve made six consecutive payments on time. After that point, it legally must go back down for your existing balance, but the penalty rate can still apply to new purchases.<\/p>\n Consequence #4: Credit Score Impact<\/strong><\/p>\n Late payments can hurt your credit scores<\/a>. The further behind you fall on your payments, the greater the negative impact on your credit score. An account that is 60, 90, or 120 days past due is worse for your credit than a 30-day late payment.<\/p>\n Consequence #5: Poor Credit<\/strong><\/p>\n Credit card lenders report late (or skipped) payments to the credit bureaus. These late payment reports will substantially lower your credit score, which can impede your ability to get a new credit card or future loan. You could even see an increase in your insurance rate as a result of this credit card negligence.<\/p>\n Consequence #6: Repayment \u201cReminders\u201d Increase<\/strong><\/p>\n Your lender wants its money\u2014if you stop paying your credit card bills, expect the billing department to begin contacting you regularly (by phone, mail, text, email, or all four methods!) to remind you of your credit card obligations. If you\u2019re only a week or so behind on your payments, these \u201cgentle reminders\u201d aren\u2019t very common. As you lag further and further behind, though, these payment reminders will become more frequent\u2014and more serious. You\u2019ll notice a harsher tone and may even start hearing about dramatic actions like \u201cdefault\u201d and \u201ccharge-off.\u201d<\/p>\n Consequence #7: Collections<\/strong><\/p>\n A \u201ccharge-off\u201d means your lender has written off the account as a loss and has closed it to future charges. You are still legally obligated to pay the debt, though, and your lender can sue you for the amount you owe until it\u2019s paid (or settled in bankruptcy). It may be sold to a debt buyer or transferred to a collection agency\u2014those institutions are usually ruthless in hounding you for payment.<\/p>\n If you\u2019ve gotten in over your head with credit card debt, it can be tempting to just stop paying. But ignoring the debt won\u2019t make it go away; that will only make it worse. Fortunately, there are steps you can take to ease the problem. The first thing to do is contact your lender. Explain your situation and work out a plan to start paying down your debt. If it all feels like too much, don\u2019t hesitate to reach out to DebtGuru.com<\/a>. One of our friendly counselors will work with you to find a solution that works for you.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Month after month, you receive your credit card bill. It\u2019s stressful because you can\u2019t pay it off\u2026 and you start to wonder, \u201cWhat would happen if I just stop sending in payments?\u201d If you\u2019ve ever been in this situation, read on! The short answer is that a lot of negative things will happen. The consequences […]<\/p>\n","protected":false},"author":1,"featured_media":1727,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[58],"tags":[],"class_list":["post-1726","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-debt"],"_links":{"self":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/posts\/1726","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/comments?post=1726"}],"version-history":[{"count":0,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/posts\/1726\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/media\/1727"}],"wp:attachment":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/media?parent=1726"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/categories?post=1726"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/tags?post=1726"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"man](\"https:\/\/debtguru.com\/wp-content\/uploads\/2022\/01\/credit-score-review.jpg\")
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