Serious delinquency on a credit card payment is known as credit card default. This status will affect your relationship with the current card issuer and your ability to receive future credit offers. It also lowers your credit score, impacting your ability to rent apartments, secure loans, and may even keep you from buying a car.
Why Credit Card Defaults Occur
When an individual gets a credit card, they agree to make a minimum payment no later than the due date, every single month. Failure to meet this deadline will lower your credit score. If you’re unable to pay your bill for more than six months, this results in a credit card default. At that point, the card company will close the account and provide a report to the credit bureau.
Anyone having trouble with their finances should contact the credit card issuer before a default takes place. Credit companies don’t want to lose out on money or customers, so they try to comply with the user. Some companies will allow you to make late payments but will raise interest rates. However, that way, you can avoid having a stain on your credit report. Once the account is in default, your options become limited. Most companies will sell your balance to a debt buyer, which is another hassle.
Make a Full Payment
If you’re able to make a total deposit, that’s the best option. It is also possible to negotiate a pay for delete agreement with the issuer of the credit card, which is an arrangement that ensures that the creditor will delete any record of delinquent payments in return for the full past due balance.
Often, you can settle your account for less money than you owe. A creditor is not obligated to accept a settlement, but many are willing to do so. While it may be tempting to avoid phone calls from credit agencies, they are likely calling to offer you a deal. It may save you a few hundred dollars and years of repairing your credit if you can pay that amount right away.
Dealing with The Fallout of Credit Card Default
You can stop calls from debt collectors by crafting ‘cease and desist’ letters. It is essential to understand that these letters only apply to third-party collectors. The original creditor is not required to stop collection efforts upon receipt of a desist letter.
If you or someone you know is dealing with credit card default, you’ll need a skilled attorney to help you make sure you’re getting the best deal. The paperwork and rhetoric can often be complicated, so it’s best to have a professional help you.
Heather Benveniste with Benveniste Law Offices is a knowledgeable Illinois credit card debt attorney who can make you aware of your debt settlement options. Having spent seven years as a debt collection attorney, she is fully aware of the tactics implemented to get debtors to pay up. She is also aware of possible areas of negotiation that the credit card will rarely tell you about. Contact Heather today at 1-800-497-5358 for a free case evaluation and learn of all of the debt settlement options available to you.