What Happens If You Never Pay Your Credit Card Bill?

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Ignoring your credit card bill isn’t going to make it go away—the consequences are pretty dire. Here’s what happens if you never pay your credit card

When Gemma, 25, first got her credit card, she told herself that she would only ever use it for emergencies. And to her credit (pun intended), for the first few months, she barely used it.

But after making a few online purchases with her card (round trip tickets to Bali for a cousin’s wedding, a new charger for her laptop), she realised how much more convenient it was to pay for things with her card. Soon, she was swiping it left and right, using her credit card for restaurants, impulse buys at her favourite boutiques, and so forth.

Though she wasn’t making any major purchases, these small expenditures began to add up and it wasn’t long before her credit card maxed out. “I was shocked when I saw my bill,” she says. “I even considered not paying my bill at all, it was such a high number.”

what happens if you don't pay your credit card

What happens if you don't pay your credit card bill? 

Gemma did end up paying her bill (she had to borrow money from her parents), but what would’ve happened to her if she hadn’t? What are the consequences if you never pay your credit card bill? Here’s why you shouldn’t let a billing cycle go by without paying your fees.

1. You’re charged a late fee

When you miss your bill’s due date, you’ll get issued a penalty. Even though the late fee may not look like much on its own, considering the fact that you couldn’t even pay your bill, it’ll suck to owe the bank even more. And this isn’t a one-time thing; every time you miss a due date, you’ll get another late fee, and it’ll keep adding up until you finally pay up.

2. Your interest rate goes higher

This’ll hurt you even more than the late fees. You could’ve started with a single digit interest rate and have it skyrocket to 20% or even 30% after missing a few due dates.

3. Your credit score drops

Missing your due date by even a month can seriously hurt your credit score. This means you’ll have a much harder time getting loans for big-ticket items, so you can say bye-bye to your dreams of buying your own house, your dream car, etc.

4. You’ll be getting a lot of calls from your bank

If you’re just a few weeks past your due date, you probably won’t be getting that many calls from your bank. But the longer you go without paying up, the more frequent and intrusive these will be.

5. You could face legal action

When you keep missing your due dates, your bank might hire debt collection agency, which usually uses a more harsh approach. They might offer to waive your debt if you agree to pay a portion of it, but if you go too long without giving any indication that you intend to pay your debt, they could take you to court, dealing you even more financial damage.

What should you do if you’re in debt?

what happens if you don't pay your credit card

The best way to deal with credit card debt is to avoid it entirely, but if you already have a huge plastic debt, here’s what you should do.

  • At least repay the minimum amount.
  • Take soft loans to pay it off, just like Gemma did.
  • Consider taking a personal loan to repay it off.
  • Negotiate (even beg) the bank for an extended moratorium.

Obviously, it’s never a good idea to ignore your credit card bills. Doing so won’t make the problem go away, but will make it even worse. Before your spending gets out of control, consider calling up your bank to reduce your credit limit. That way, if you ever max it out, it’ll still be a manageable amount. Take control of your spending and be aware of how you use your credit card, and you won’t even have to consider never paying a sky-high bill.

READ: Choosing A Credit Card: What’s The Perfect Credit Card For You?