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Credit Card Debt: Not paying credit card bills? You could face criminal charges

Credit Card Holders Alert! Credit cardholders often end up making a big mistake and i.e. not paying their credit cards pending bill. Credit card default is levied on non-payment of long-pending bills as benefits of a credit card far outweigh the disadvantages. Not paying pending bills may lead you to pay hefty penalties or even criminal suit.

India TV Business Desk India TV Business Desk
New Delhi Updated on: December 05, 2019 13:02 IST
Credit Card Debt: Not paying credit card bills? You could

Credit Card Debt: Not paying credit card bills? You could face criminal charges

Credit Card Holders Alert! Credit cardholders often end up making a big mistake by not paying their credit cards pending bill on time. Credit card default is levied on non-payment of long-pending bills as benefits of a credit card far outweigh the disadvantages. Not paying pending bills may lead you to pay hefty penalties or even criminal suit.

If the cardholder pays the balance of the credit card in full each month, no interest or financing charges are levied on it. But if the total balance is not paid, banks will charge full interest on the entire outstanding balance from the date of each purchase.

SBI Cards IPO recently released data that revealed that the company has filed 19,201 cases under Section 138 of the Negotiable Instruments Act and 14,174 cases under Section 25 of the Payment and Settlement Act 2007.

This data shows that there are thousands of credit cardholders who don't pay their pending bills. 

Consequences Of Credit Card Default:

  • Customer will be blacklisted
  • Credit card will be blocked
  • Legal action can be taken
  • Access to credit will be harder 
  • High-interest rates will be charged
  • Credit score takes a hit 
  • Assets acquisition

What happens if you don't pay credit card bills?

Number of Missed Credit Card Payments Consequences
One to Two
  • Late fees
  • Loss of introductory APR
  • Penalty APR
  • Damage to credit score
Three
  • Late fees
  • Increased damage to credit score
  • Closed credit card account
More Than Three
  • Late fee
  • Substantial damage to credit score
  • Debt sold to a collection agency
  • Lawsuit

A case under the Negotiable Instruments Act is filed when your credit card bill payment cheque bounces while a case under the Payment and Settlement Act is filed when an electronic transfer (such as an auto-debit) bounces due to insufficient funds. In both cases, the credit card company( bank) has to send a notice to cardholder asking for payment within 30 days of the cheque bouncing/auto-debit failure. If you fail to make the payment within 15 days of this notice, a case under these sections can be filed.

Not paying credit card bills on time or credit card debt can move you into a blacklist with credit rating agencies like CIBIL. 

ALSO READ: Holding Multiple Credit Cards? Then this is what you need to know!

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