The steps taken by credit card Company's when no payment is made?

Question

I am curious what are the steps taken by a credit card Company when a person has not paid his bills? Can anyone tell me the steps from begining to end? Thank you

considering a person has no income at all...

Answer 1

A person who has no income shouldn't be making charges on a credit card.

As others have said, you'll pay late fees, get dinged on your credit report, go to collections, and get sued. When the collection agnecy takes you to court, they win a judgment which means for the next 10+ years (they can renew judgments), they can attach you bank account or lein your house or garnish your wages. Oh, the judgment hurts your credit score even more.

Answer 2

First, they send you overdue statements. When you haven't called to explain to them why you're not sending them money, then the collection calls begin. It starts with the company that gave you the card. "Ma'am, we have not received a payment, if you do not pay this will be sent to collections, yadda yadda." They will get increasingly rude and threatening as they go, because they make a commission off every payment they get. You will start getting calls three times a day. After this, it goes to collections. Eventually, if you do not pay the collection company, they will take you to court and sue you.

You need to call and explain to them what is going on, and see about making arrangements with them NOW. They are MUCH more forgiving of you if you tell them in advance, rather than let it just sit.

Answer 3

Okay I worked for Citi Cards and specifically handled the Sears portion of their portfolio and this is how it legally works. They can call you after you are 1 day late on your payment, however, out of courtesy most companies wait at least 10-15 days of being past due before they call you. Each month you are past due you will receive a late fee, interest will accrue the entire time, and your interest rate will usually sky rocket (sometimes 30%). Now they can lower your available credit too which can bring over the credit limit fees into the picture. (For example you have a 1000 dollar limit and you have an 800 dollar balance, you go past due and they lower your limit to 500 dollars and now you are over the credit limit in which there is a fee). Going past due also knocks you off any programs such as no interest.

Now once past due they CAN call you up to 3 times a week with having contact with you and up to 6 times within one day (if they don't get a hold of you). Once they contact you they simply tell you are past due and usually advise you of your payment and it's next due date. Often they request payment for last month's and the current month's but you are only obligated to pay the past due balance and are allowed to wait till your current due date for your current month.

If you choose not to pay you can usually wait up till 30 days of being past due before it gets reported to your credit bureau. Now the company's reporting date is a set one so to be safe I would pay no later then 25 days past due to avoid your credit being affected.

Once it is reported they will call you asking for payment, offering usually very few incentives for being a month late. Some companies offer some incentives for being 2 months. 3-4 months being past due your credit is already shot so you might as well wait 6 months until right before they threaten to charge you off in which they offer the best incentives.

Now different companies have different charge of dates, like some will charge you off at 3 months, others 6. So if you do go past due I would ask how many months they wait before they charge you off. The above was how Citi Cards works and a generalization of how it typically works. As always the most information available is in the credit agreement pamphlet the company sent you that no one ever reads. All fees should be explained in there. Any other questions?


**as a side note if it is a big company typically they have their own collections department they work with you with till they sell your account off to a "shadier" collections agency (or charge you off). Once you get to these smaller outsourced companies, they have rules, but they often don't follow them. There is something called the FDCPA which you should be able to find somewhere on the internet which explains your rights as a consumer. Now I haven't worked in these smaller companies so I don't know how they get away with violating a lot of these laws but the bigger companies want to follow them as closely as possible. The bigger the company, the bigger the lawsuits...

Answer 4

I dont think many people here work for the credit department of credit cards..If you dont make your payment expect phone calls ,letters if you ingore those expect to be sent to collections in about 90 days

Answer 5

You'll get a 30 day late notice and fee
It will affect your credit
than 60 and more fees
affects your credit even more
than it goes to collection
affects your credit worse

Good Luck