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Time may be of the essence when dealing with credit card debt

You may feel that swiping your credit card is the easiest payment option under a variety of circumstances. Whether you are making the most of a rewards program or simply cannot stand to carry cash, this alternative payment option can come with its benefits, but there could be a catch.

Whether it begins with a month where you forget to make a payment or if a change in financial circumstances leaves you struggling to keep up, falling behind on a credit account can be disastrous. As your troubles continue to mount, you could be wondering just what will happen to your account.

The steps of delinquency

There are several potential consequences to falling behind on your credit card payments, each of which may depend on how far past due your account is. A timeline for what will happen to your account could be as follows:

  • First missed payment: Upon missing your first payment, the creditor may add a late fee to your account. The company may also report the issue to the various credit bureaus, and your credit score may take a hit.
  • 60 days past due: In addition to late fees and a mark on your credit report, once your account falls this far behind, your interest rates could skyrocket, and penalty rates can go as high as nearly 30 percent.
  • 90 days past due: At this point, creditors could choose to place your account in collections, and the constant phone calls and collection letters that follow can be exhausting to handle.
  • Four months and beyond: Unfortunately, it may only get worse from here on out, and once your account falls behind by 180 days or more, the creditor may choose to charge-off the debt, which can have a devastating impact on your credit score.

Since there could be a multitude of options to sift through when forming a strategy to combat credit card debt, choosing the most viable outlet can be stressful.

Choosing a path for relief

Dealing with high levels of credit card debt can be exceedingly daunting, and you might be concerned with what will happen to your financial future. With so much at stake, it could be in your best interests to speak with someone who is knowledgeable in federal and New Jersey state bankruptcy laws for advice on each available outlet for debt relief. In doing so, you could gain a better understanding of how to choose the correct path to reduce or eliminate your debts and regain control over your financial future.

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