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.
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.
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.