What Happens When You Default On Credit Cards

Defaulting On Credit Cards

Default On Credit Cards – Defaulting on credit cards happens mostly when you have become overly negligent on the payment arrangements for your credit cards. The whole idea of credit card default may be such a messy affair, since it may end up greatly affecting the standing you have with that particular credit card. Additionally, it may also lead to an interference with your future approvals for any services that are credit based. You therefore should be in the know about what happens when you default on credit cards. This will help you in a big in avoiding the defaulting process.

How The Process Of Credit Card Defaulting Occurs

There are often certain terms and conditions that you are often made to agree to, when you get to accept a credit card. For instance, there is usually a due date that is listed on the statement of the credit card; to which you are supposed to agree to. If after making this agreement, you go ahead and miss to commit to making the minimum payable about in six consecutive months, then your credit card will be considered to have defaulted. What happens next, is that the issuer of your credit card will now then decide to most probably have your account closed, and the issue will then get reported to the bureaus for credit. In the actual course of the months that will be leading up to the late payment by a credit card user, the issue will already have been reported to three different credit bureaus. This will only mean then, that the score on your credit will become quite impacted by the late payment.

Fixing Your Credit Card Default

If in any case you try applying for a new credit card or any loans after the default on credit cards, your application will automatically get denied. This is so because the creditors will definitely think that you stand a high chance of defaulting again. Most lenders will actually not agree to lend you any money, until you have cleared the balance for defaulting. You must thereby get credit card relief before you get eligible for any loans. One of the many disadvantages of credit card defaulting, is the fact that you will end up accumulating a fee of great interests in the tune of hundreds of dollars.

At this point, the number of options that may be available to you, may also be quite limited, mostly because of the number of different payments that you have missed to make on your account. In an event that you decide to contact the issuer of your credit card early enough, then you may stand a chance to redeem yourself. This is because, a plan can be worked out for you, to make the balance payments and have the account brought back to a standing that is good. This credit card debt settlement plan will enable you to pay the amount fully.

The Available Options for Dealing With a Credit Card Default

There are quite a number of ways through which you are able to have the credit card debt settlement taken care of.You can take care of your defaults in the following ways:

Have The Account Paid In Full

If you have the money to do so, you can actually negotiate for a delete process of the credit card. Here, you give money and the issuer of the credit card gets to have the defaulted account removed from your credit report. This is often done in exchange of some payment. It is however not fully guaranteed, since some crediting companies may agree, while others may blatantly refuse. You however need to ask in order to confirm about this.

Have The Account Settled For A Figure That Is Less Than The Actual Amount That Is Due

This is yet another credit relief program that may be used to offset defaulting credit cards. Despite the fact that some creditors often do not accept any amounts lower than the due amount, others may get persuaded to do so. This is often, most in cases where you as the defaulter, has taken so much time to pay, because of one reason or another.

File for Bankruptcy

In the event that you have other outstanding debts, or even depending on the level and extent of your credit card default, you may consider filing for bankruptcy. The whole idea behind so doing, is often so that you may either have your debt completely discharged, or to try to make it more affordable. However, you must take note of the fact that your credit report will have the bankruptcy for quite a long period of time, of between 7 to 10 years in total.

Different Tips For Credit Card Debt Relief

Since you now know what happens when you default on credit cards as discussed above, it is therefore very important to make plans that will enable you to take care of all the debts. Consumer Credit Card Relief company has a credit card relief program which you are able to consolidate your credit card debt. Discussed below are some of the ways you are able to have a credit card relief program:

Make Payments For The Credit Card Debts That Have Higher Interests First

You should make a list of all the outstanding debts that you are having and have the amount written as well, against each debt. Next you should have the debts of the credit cards arranged from the one with the highest interest, to the very lowest. You should plan to start paying the one with the highest rate because at the end of the day, they are often the most expensive to pay.

Prepare A Budget & Start Making Plans To Pay

At this point in time, you should make sacrifices to try and reduce all other unnecessary expenditures, and focus only on using any extra monies to offset the loan. Create a budget so you have an idea where the money is going and to be more organized financially.

Have The Credit Cards Frozen

Whenever you are having your credit cards, you will tend to impulse buy more than is actually necessitated. They will thus deny you the chance of making plans on how to spend your money. Make an intentional deliberate move to start making payments for different things using actual cash. At the end of the day, whatever sums of money that you will have saved, should then be channeled towards clearing off the debts. This works greatly as a credit card relief program.

Look For Alternative Sources Of Income To Increase What You Earn

The main reason as to why to fell into great debts is because your expenses are way above the amount of money you get for an income. For you to have a Credit Card Consolidation, you must look for ways by which you make extra money. For instance, you could decide to work for extra hours, over the holidays and weekend; all for some extra money. Alternatively, you could get yourself a side hustle. Then you can have all the extra earnings channeled to the credit card debts, in a bid to get you financially free.

Have The Amount Of Monthly Installments Being Paid Greatly Increased

You should try as much as possible to pay more than what the minimum amount of the monthly payment is. If you can work so hard and diligently as to be in a position to double, or even make triple this particular amount, it would be way better. This is especially because the period for the load repayment will be reduced, hence reducing the interest rates altogether. This will be way cheaper cumulatively.