What If I Don't Pay My Credit Card Bills?

Paying your credit card bills is essential to maintaining financial health.

Your decision not to pay your credit card bills will add some money to your pocket. However, deciding not to pay your bills will cost you far more in the long run.

Significance

Deciding not to pay your credit card bills constitutes a breach of the contract between you and your card issuer. This gives the card issuer the legal right to cancel your card and collect the money that you owe, according to Bankrate.com.

Function

Credit card companies can transfer your account to a collection agency, which can hassle you with calls and letters, according to MSN. If the amount you owe is high enough, the card issuer can take legal action against you, resulting in a judgment that you must pay.

Considerations

Your decision not to pay can also impact your credit score. Card companies report late payments to the credit bureaus, which negatively impact your score. Once your card is canceled for nonpayment, the card issuers will report it as a collection account, which has a profoundly negative impact on your score. Any judgment that a credit card company obtains against you will go on your credit report.

References

• Bankrate: Consequences of Ignoring Credit Card Debt
• MSN: How to Not Pay Your Bills