Deciding to stop paying your credit card bills is a serious matter with significant repercussions. While the idea might seem appealing if you're facing financial hardship, it's crucial to understand the potential legal and financial consequences.
Firstly, ceasing payments will immediately and negatively impact your credit score. This lower score can make it harder to get loans, rent an apartment, or even secure certain jobs in the future. Credit card companies report missed payments to credit bureaus, which directly affects your creditworthiness.
Secondly, the credit card company has the right to pursue legal action to recover the debt. This could involve a lawsuit, which, if successful, could lead to wage garnishment or liens on your property. The amount you owe will continue to grow due to accruing interest and late fees, further compounding the problem.
Before stopping payments, consider exploring alternative options. Contact your credit card company to discuss hardship programs, which might offer temporary reduced interest rates or payment plans. You could also seek assistance from a credit counseling agency, which can help you create a budget and negotiate with creditors. Remember, stopping payments should be a last resort after exploring all other avenues for managing your debt.
Stopping Credit Card Payments: What You Need to Know
Thinking about halting your credit card payments? It's a big decision with potential consequences. Before you take that step, it's important to understand the risks involved. This includes potential damage to your credit score and possible legal actions by your credit card company. Learn about the impact on your financial future before making this choice.
Source: Read the original article at CBS