Credit Card Defaulter

Consequences of Credit Card Default

1. Customer will be blacklisted: Banks and credit card companies will blacklist people who fail to make payments towards their credit card. The default will also be reported to all other credit bureaus. This information will become accessible to all banks, lending agencies, and credit card companies.
2. Credit card will be blocked: The bank will first block the credit card of the defaulting customer in order to prevent him/her from using the card in the future. The cardholder will no longer be able to swipe the card to pay for services using the same. Therefore, until all dues are settled and the bank is convinced, the card cannot be used again.
3. Legal action can be taken: Legal action can be taken in the court of law for credit card payment default. The name of the violator will also be a part of the credit card defaulter list in India. This can be made into a civil dispute and the case can be filed in a court of law.
4. Access to credit will be harder: Since the name of the violator will be blacklisted, it will be very difficult to get loans or any type of credit in the future.
5. Recovery agents may approach the cardholder: Usually, banks tend to give customers some leverage and time to pay the bill. This can extend anywhere between 60 days to 90 days depending on bank to bank. If no payments are made even after this period, the case will be forwarded to the bank's recovery house. Recovery agents will then approach the cardholder and ask him/her to settle the bills at the earliest.
6. High-interest rates will be charged: For those who have repeatedly missed their payment due dates, the rate of interest charged will be significantly higher. This is known as penalty charges.
7. Credit score takes a hit: The credit rating of the customer will definitely take a blow if payments are defaulted. This is because credit rating agencies regularly receive reports about credit card holders and their payment histories are carefully recorded.
8. Assets acquisition: This is the worst possible scenario and can happen only at the last stage. If the bank has access to the savings bank account or other accounts of the customer, funds from these accounts will be used towards the outstanding bills. Apart from this, some banks may also seize properties owned by the cardholder to settle the dues.

Can a Defaulter Go To Jail For Not Paying Credit Card Bills?