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What happens if you don’t pay credit card bills?

Credit cards will be much beneficial for us if we can use them wisely. Overspending through your credit card can make you fall into a debt trap that can hamper your budget and eat all of your future income.

The biggest mistake a credit cardholder can make is not paying the credit card bills on time. By not paying your pending bills you will step towards increasing debts as you may have to pay penalty charges and interest payments.

If you pay off the entire balance of the credit card in full every month, the credit card company will charge no interest on your due balances. But if you do not pay off the total balance, the credit card issuing bank will charge full interest on the total outstanding balance, starting from the date after your due date.


In India, there are thousands of cases of credit card default where cardholders don’t pay credit cards totally. As a result, they might face some consequences like:

High-interest rates might be charged
Credit card will be blocked
Cardholders might get blacklisted
Legal action can be taken against the cardholder
Credit score will get a blow
Getting difficulties to get a new credit

What happens if you don’t pay credit card bills?

1 to 2 missed Payments
The outcome
  • Late fees
  • Loss of introductory APR
  • Penalty APR
  • Damage to credit score
3 missed Payments
The outcome
  • Late fees
  • Increased damage to credit score
  • Closed credit card account
More Than 3 missed Payments
The outcome
  • Late fees
  • Damage to credit score
  • Debt sold to a collection agency
  • Lawsuit

How to resolve a credit card default

You may resolve credit card default issues in the following manner:
If you have enough funds in your bank account, it is best to pay off credit card debts entirely.


You have the option to negotiate with your credit card provider and ask for an easy repayment option.

The credit card provider may allow you to make payments via easy monthly installments. You may even make a minimum payment to keep the cycle rolling and get out of the default list.

The longer you take to make payments, the more critical the situation may become. In the end, a civil case might be filed against you. If you want to avoid this situation, make the minimum payments for every card each month.

Do you need to settle credit card debts?

A credit card is a very useful and important financial instrument if you use it wisely and pay it off on time. A credit card is beneficial if you need financial help when you have an emergency. But unfortunately, despite having such benefits, the high-interest rate on credit cards can increase your financial burden.
As of January 2020, the average credit card interest rate is about 21.28%. So, if you keep a credit card for several months and do not make bill payments on time, it can make your debts rise without any limitations. A big amount of this debt would be just the interest charges.
So, if you are facing the issues of credit card default and can’t afford to pay such huge debts, contact your credit card company and negotiate. You may settle your credit card debts into a lower amount than what you have actually owed. But debt settlement has an immense effect on your credit score./div>

The Impact on your credit score

Facing the credit card default can affect your credit score. Settling your credit card debts with a bank is also harmful to your credit as it may severely affect your CIBIL score. Having a good CIBIL score nowadays is the most desired thing for any person, as it will help your credit applications to get approved easily. Lenders or credit card companies will always fetch your score while reviewing your credit application. A good credit score helps you to get low-interest offers and easy approvals for almost all the credit cards and loans. Similarly, a bad credit score or a poor credit score will do the opposite. It will reduce your chances of getting future loans for a limited time.
credit score

So, as credit card debt settlement may affect your credit score, so you must consider if it is suitable for you. You can talk to your credit card company (bank) and request them to suggest easy repayment options. If they allow you to make payments via monthly installments, make sure you pay those installments on time every month. You should also stop using that card for a while.