A credit card default happens when an individual fails to make any payments towards their credit card outstanding bill for a long period of time. If a customer fails to make even the minimum payment amount to the credit card company for six months in a row, he/she will be put in the defaulter list and their credit card account will be immediately deactivated. Those who use credit cards should be very careful and pay their dues responsibly to avoid being put on a credit card defaulter list.
Consequences Of Credit Card Default:
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.
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.
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 the court of law.
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.
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 from 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.
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.
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.
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?
Most banks will leave legal action to the last resort. First, the credit card company will contact the cardholder and ask him/her to make payments and also give the defaulter a reasonable amount of time to atleast make a minimum payment. As a last step towards recovery of dues, credit card companies will file a civil case. Generally, criminal cases cannot be filed for civil disputes.
For How Long Can A Cardholder Miss Credit Card Payments?
As a general norm, it is better not to miss credit card bill payments as it will significantly affect the credit score of the individual. Banks tend to give customers a 60 day to 90 day grace period to make payments. During this period a penalty interest rate will be charged for late payment of bill.
Even if the credit card bill is paid a day later than the actual due date, a certain amount of fee is charged for late payment in the form of interest. This interest rate varies from bank to bank and ranges anywhere from 6% to 20%.
It is possible to negotiate with the credit card company or bank in case of a default. In some cases, the EMI towards the outstanding amount can be reduced by increasing the tenure and the interest rate.
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I got RBL card offer from BAJAJ Finance. I have been using this card past 10 months which is a life time free card. The credit limit is sufficient of 55K. EMI conversion is avail and I can convert via mobile app whenever required with nominal charge. I use this card for general purpose. Based on usage I get points but not yet redeem it.
SBI credit card have offers and reward points but I have not redeem them yet, this is a domestic card, the credit limit is of 50000 which I am very much satisfied as per my need. I got my statement on time. I used this card for personal purposes.The card is very user friendly.
I am using SBI credit card for more than three months, there are some reward points and offers in the card. I used this card for online shopping, fuel surcharge and groceries.The credit limit of the card is sufficient and I like the most about the card is that it is a life time free card and very good to use.
The bank agent suggest me to take credit card from INDUSIND and I have taken it because it doesn't have any annual fee. The offer and reward points are available in the card are good. I am satisfied with the limit of the card. I used the card for general purposes. But it will be nice, if the offers and reward points will be more.
I am using INDUSIND credit card for 3 months. The card have no offers available and also there is no rewards. The only benefit is that its a life time free card and the credit limit is only for 75000 I am not that satisfied as i expected to get around 1.5 lakh. Apart from the limit over all experience is good.
I have got INDUSIND credit card few months ago and I have used it for two months now ,the credit limit of the card is Rs.70000 which is a life time free card. The bank have informed me every details about the reward points and offers but I have not got any time check it. I am satisfied with their card service.
Am having ICICI credit card for two years, I feel good and have not face any issues. The best part about the card is its a life time free card. I used to get my card statement on time. I used this card for shopping, groceries and for many other personal purposes.I am using the bank mobile app which function smooth and simple.
I have used SBI credit card for 2-3 months, but I have not got any time to check about the offers available in the card. The limit of the card is 38000 and I am satisfied because its a life time free card. I used to get my card statement on time and the net banking is also working very well.
Since it is a life time free card offer from INDUSIND so I chosen it and applied through online. I received a call on time and they have done the verification process. Hence I received the card by 7 days, the credit limit is okay for me. Its easy to use for all purposes.
CITI has provided good offers and benefits on 2 months before. So I chosen this card and applied through online. It is annual fee chargeable of 500 rupees bu there is waiver off option if I spend 30K within a year. The credit limit is 65K. There is EMI conversion avail for this card.
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Reviewed on Mar 21, 2020
I have used credit card from HDFC bank for 1 year which is very good and also very comfortable, its a life time free card and lots of offers are available in the card. This card was suggested to me by my colleague. Mobile banking also functions very smooth.
INDUSIND bank credit card have an credit limit of of Rs.75000, there is no offers available in the card and it also have a charges of 3000 along with GST. I hardly receive any remainder messages for my bill payment due to that some time I could not pay my bill on time. I would advise them send my bill on time before the due date.
I have been using ICICI card for more than one year. They have provided an annual fee chargeable card and waiver off option is applicable. The credit limit is okay of 50K. Since I need to do purchase about 45K on some of the month so this limit is not sufficient. I swipe the card for travel, shopping and fuel purposes. I have not opted for EMI conversion.
I have been using AXIS bank credit card for 3 years, Its a life time free card so I applied the card through bank. The agent have informed me everything about the card. I used to get offers of 10% on petrol bunk and shopping.The limit of the card is Rs.45000 and I used to pay my bill directly through bank.I am also using their net banking which is very good.
I got INDUSIND credit card from few months ago.The card have an EMI conversion. I used the card for multi purposes like shopping, online payment, ticket booking. This is annually chargeable card, I am not satisfied with the credit limit of Rs.75000 as I am expecting more than than 1 lakh.
I got a life time free card offer from INDUSIND bank hence applied through online on three months back. I received the call on time and the process was done on smooth. I got the card on exact time frame. The credit limit is sufficient and they provided good offers and benefit as well.I use this card for shopping and travel purpose.
RBL credit card is a chargeable card, I always have to go to Bajaj Finance to pay my credit card bill. I am not satisfied with the customer service which has to be improved. I used this card when ever needed for shopping, fuel surcharge and bill payment.The limit of the card is fine.
HDFC credit card is very convenience to use, I have been using the card for 4.5 months for Shopping, groceries, fuel surcharge and electricity bill payment also. I pay my credit card bill through ATM. I always get my bill on time, this card was suggested to me by the bank agent.
I used RBL card for twice only. I get message or call for EMI conversion from banker. It is a life time free card. Once all the process done I received the card by 15 days. I am holding this card past 6 months. The credit limit is sufficient of 30K. Once I tried to convert for EMI of 3 months it was done on time without any problem. It is Bajaj card.
I have been using SBI credit card for the last two months, the credit limit of the card was satisfied it was Rs.9,80,000. The bank agent came and collect my document he have informed me every detail about the card. The card have a charges of Rs.2299 in a year. I used to pay my credit card bill through bank. Am getting my card statement in softcopy but I wish the bank can send me a hard copy statement also.