Credit cards are a fancy trap
They make you buy things that you like but things that you can’t afford to buy from your monthly income. Getting a credit card is just like borrowing money from a financial institution. The more you borrow the more the interest rate you will pay.
Most people use their credit cards to acquire things that are expensive and out of their budget. Keep in mind that you must only use a credit card for emergencies. Remember that the plastic card doesn’t come cheap. All is well if you make your interest payments on time to the bank. The problem arises when you default on your credit card payments. Your credit card company might torcher you but it can’t really punish you.
What Will Happen If You Don’t Pay Your Credit Card Debts?
Your credit card company i.e. your bank will mark you as an offending member as soon as you default on your payment. At first, your bank will call you and remind you to clear your outstanding payments. If you still fail to make a payment, then your bank will make regular calls. If you still fail to clear your payments, then your bank will dismiss your case and hand in your account to a collection agency.
Remember, that the collection agency is a 3rd party and a completely different institution. This agency will now convince you to make your credit card payments. You Can’t Be Jailed for Defaulting On Your Credit Card Payments One of my friends who work at a famous bank told me that a bank can never send a card holder to the prison.
Most of the banks just give cold threats to their card holders. Nobody till date has ever gone to prison for not clearing their debts. Moreover, even the collection agency can’t send you to the prison. It can only persuade you to clear your payments.
In What Ways Can My Credit Card Company Punish Me?
If you default on your credit card payments, it will have a negative impact on your credit history. This means that you might face a lot of difficulties while applying for a personal loan. On the contrary, these days a lot of companies check credit history of prospective job candidates. If you have a bad credit history, then a company might not consider you for a suitable position. The bottom line is that you will face a lot of difficulties if your credit history is not up to mark.
Your Credit Card Company Can Sue You! Yes, your credit card company can sue you. However, keep in mind that your account must be “seriously delinquent” if your credit card company wants to sue you. An account cannot be seriously delinquent in one month; it takes years for an account to be titled delinquent. Hence there is no need to be worried.
On the other hand, your credit card company might agree to move forward with a wage garnishment or bank levy. Wage garnishment is basically a process when an employer withholds the wage of an employee because the employee was not able to repay his/her debt.