What Happens If You Don't Pay on a Credit Card?

••• Steve Woods, www.sxc.hu

Late Fees and Interest

Late fees and interest will begin to accumulate on your account if you do not pay your credit card. The longer you go without paying, the more fees will accumulate. The more fees that accumulate, the more interest you will owe.


Your credit card company will cancel your card because of nonpayment after a certain amount of time. This time varies based on the terms set for the credit card and is at the discretion of the credit card company. You may not even know the card has been canceled until you try to use it.

Settlement Offer or Alternate Payment Plan

You may receive a settlement offer or an alternate payment plan for the amount owed on your canceled card. This is up to the credit card company, but you can call and ask if they will make an offer. Only call if you are honestly willing to pay the debt.

Credit Reporting Agencies

Your credit card company will more than likely report the debt owed to one or all three of the major credit reporting agencies. They will also report that the card was canceled by them for nonpayment. These negative marks on your credit report will lower your credit score and possibly affect your ability to get credit cards or loans in the future.

Collection Agencies

If they are unable to convince you to pay the debt owed, the credit card company will probably hire a collection agency to attempt to collect the debt for them. Collection agencies are persistent and aggressive, so you will receive many phone calls (at home and possibly at work) and letters from them.

Getting Sued

The credit card company may sue you in order to collect the money you owe them. This could result in a lien on any property you own or even in garnishment of your wages, which are automatic payments deducted from your paycheck and sent to the credit card company.