Most St. Petersburg area residents have at least one credit card. In fact, the average American has at least four credit cards. Occasionally situations arise in which a person is not able to pay their credit card bill. Maybe they have just lost their job, have unexpected medical bills or car repair bills, or any other unexpected financial situation crop up. A person may wonder what happens if they stop paying their credit card bill.
The first month
When a person doesn’t make their credit card payment by the due date the credit card company will charge a late fee. They may also experience a credit score drop because of a missed payment.
2 to 3 months
When a person misses more than one month of payments, they will receive a late fee for each missed month. They will also be reported to the credit bureaus and the missed payments can remain on a person’s credit report for up to 7 years. The card issuer will block the cardholder from making any more purchases and the interest rate can go up to 29.99%.
4 or more months
If a person stops making a payment for several months, the credit card issuer will charge off the balance. This means that the amount will be sent to a collection agency who will call the consumer nonstop to try and get payment. This can also wreak havoc on their credit score, and they will also have to pay taxes on the cancelled debt.
A legal professional who is skilled in bankruptcy can help their client by explaining their options and what may be the best course of action. They can help their client make a fresh financial start and protect their future.