What if I defaulted on a credit card?

Question

First let me say that I have several credit cards. One though has really begun to screw with me. First they raised the interest rate to 21.9% and now the monthly payment is unreal (I have never been late on the payment but because we bought a house and car they feel they are justified to do this). Because the raised the interest rate it caused us to go over the limit and they have tacked on overage fees. What happens if I just stop paying the bill and when I get my taxes back in Jan. pay off the whole account? I don't know if I will end up in court if I do that or what will happen. Please Help!!!!

We have had this card for almost 5 years and I cut the card up in December of last year and there hasn't been a charge on it since. I also tried to close the account and was told that I couldn't until the account was paid in full...Never again will I get another credit card.

Answer 1

Don't stop paying the bill. If you fail to pay the bill you will be listed as paying late on your credit report(30,60,90 days late). This is bad, however in about 3 months they will "Charge-Off" the account and sell it to an outside collection agency, this is MUCH worse. You not only will have this negative information for 7 years but a collection account that will also be listed and kill your score.

You won't end up in court that soon, that takes at least a couple of years. However, you are going to keep being hit with huge fees and interest. At least pay the minimum amount due until January then pay it off.

Answer 2

It sounds like you didn't get a fixed rate. That was a mistake, but there's nothing you can do to change it now, except know better for next time.

You can't just stop paying the bill; that's illegal, and you'll get bad credit.

First thing to do is stop using the card; you don't want to rack up any more charges. It's best to pay it all off in one go, especially with such a high interest rate (that's outrageous, by the way); once you do that, you can tear up the credit card and close your account.

If you can't pay it off now, get some help. Talk to a debt consultant, and see if they can do anything to help. If not, you may need to borrow money from a friend or family member if you can; make sure to explain the situation, and that it's an emergency, and promise to pay them back. It's better than paying back the bank.

Good luck.

Answer 3

Don't just not pay it. See if you can transfer the balance to a lower interest card and then close/cancel that account. Even saving 5% interest going from 21% to 17% will save you money. Many cards have 0% or 2% due for the first 6 months of a balance transfer--shop around. Good luck!

Answer 4

i'm hoping which you will settle with the credit card company. You owe the money. Paying off/settling with the corporate will help yet no longer inevitably treatment your situation. although you do don't get yet another card. as a exchange artwork everywhere you may, set up a financial organisation account and get a "examine" or "debit" card. As you utilize this new card to stay comparatively much less costly you're no longer doing adverse issues. you're setting up which you're a to blame individual and you have an honest tale to tell potential employers. in the event that they insist on the "credit" then you somewhat truly do no longer choose to artwork there as a results of fact they'll proceed to handle you as a cipher and not a individual.

Answer 5

Yes, they have a right to raise your rates.
It's probably in the fine print of your credit card agreement under the heading "universal default" or something similar.

Since you bought a house and a car, your debt-to-income ratio has changed. Therefore, they now see you as a higher risk of default.

Don't stop paying the bill. This will only make matters worse.

Use this link to find ways to cut spending and save more.

http://www.freewebs.com/savingslist/

Answer 6

You might get sued. You certainly will ruin your credit rating, for at least seven years. Try negotiating a payment plan and agree to cut up and not use the card again. Tell them they will be forcing you into bankruptcy if they continue piling on the charges.

Answer 7

They will keep on adding overlimit and late fees each and every month making the whole situation worse and yes it will affect your credit score, take the hit get it below the limit then call them and ask why your interest rate was raised.

Answer 8

The same thing happened to me so this is what I did. (it worked) Call the credit card co. and tell them that you do not agree to the new intrest rate. They will tell you that you will then stay at your past intrest rate, but in turn for doing this they will tell you that when it comes time to renew your card (the date it is going to expire), they account will be closed. I was so mad that they had done this to me that I read up on MY RIGHTS, and used it against the wonderful cc companies. Its amazing how they change there tune with you when you let them know you are aware of your rights. Good luck!!

Answer 9

Can you take on a second job for a little while? Get that sucker paid off and snip all those credit cards in half. A mortgage is all the debt you'll ever need.

Answer 10

1. You default on a Payment...Rate, Overlimit Fee will be Charged.
2. If you are Late: You will be charged a Late Fee...
3. If you pursue and not pay the minimum Payment, the Account will goto the collection Dept after about 2-3 Months.
Depending on the Bank.
When this happens you credit score may drop.
Somtimes you are able to negociate with the Collections Dept and start a payment plan after the account is closed...
You may also negociate your payment and how much you'd like to pay or make the payoff...

Best Advice, try to make the minimum payment, if not; call them and work out an arrangment.

Last, Refinance and include your debt with a Debt Consolidation Loan...Very simple and will not hurt your credit.

Regards,

www.FinanceYourWay.com