Here is the list of repercussions of credit card payment default.
Facing legal consequences is a real risk for credit card defaulters, with debt collectors often working in favor of creditors. Imprisonment is the maximum penalty for credit card default, in India. It's advisable to prioritize timely bill payments to proactively avoid potential legal issues and ensure a smooth financial journey without any lingering problems.
You will be considered a credit card defaulter if you do not pay your credit card bills for six months. Your credit card will be blocked by the bank, preventing any further transactions with it.
Default on credit card debt can lower your credit score. If you miss a payment, it will have an impact on your credit score. This is because credit rating firms receive reports on your payment history regularly. Your financial health will be harmed if you do not pay your bills on time.
When credit card bills are not paid for more than 60 days, credit card firms charge interest rates as high as 30% of the amount owed. This high-interest rate will also be applied to any new purchases made with your credit card.
Banks now can use funds available in your savings or other accounts to clear outstanding balances if you do not settle your default on credit card debt. Banks may also seize your property or other assets to pay off your debts in the worst-case scenario.