During difficult economic times, parts of your budget must be cut in order to afford the necessities. Often, credit card bills are one of the first things to be neglected. It may seem like a good idea to push aside your obligations to pay your card bills, but there are some serious ramifications that can come from this behavior. It is important to understand the ramifications of not paying your credit card debt. Consider these five good reasons to pay up.
Credit card companies are notorious for tacking on late fees when a payment is even just a few days late. These fees can be anywhere from $ 25 to $ 50. Some are even higher. This fee is incurred on top of your payment and the balance that you owe.
Collection Calls and Legal Action
Failure to pay your credit card bills will result in collection calls and could ultimately lead to legal action. These bill collectors can legally call you anytime between 8 am and 9 pm, seven days a week. If you don't pay, the credit card companies can take legal action against you. This can land you in court and on top of your original balance and late fees; you could also find yourself paying court costs and attorney fees.
Higher Interest Rates
Just one missed payment can result in your interest rates being increased. You can wind up paying much, much more over the principle due to higher interest rates. The thing is, this practice is completely legal! If you are late just one time, you could find yourself paying.
Bad Credit Score
Of course, you know that not paying your bills could result in a bad credit score. This can hinder you in a lot of ways. A bad credit score can keep you from purchasing a house or car, or from getting more credit.
Inability to do Certain Things
Do you want that management job? Do you want to work in a federal agency where you have to have a security clearance? Do you want to rent an apartment? Your failure to pay your credit card bills can keep you from doing any of these.
Many companies run a credit check on their prospective employees in an effort to determine how trustworthy they are and whether they will be dependable. Security clearances for certain federal agencies require credit checks. While they don't look at your credit score, they do look hard at slow payments and failure to pay bills – and they don't look at it favorably. Apartment complexes and even private landlords run credit checks as part of the application process. If your credit report shows that you don't show your credit card bills, it could cause you to lose out on a nice apartment or condo.
Paying your credit card bills is just the right thing to do. However, if you need some extra incentive, these reasons should make it very easy to make the decision to pay your bills.