If a consumer does not pay at least the minimum balance amount on credit card bills, it can hurt his credit score. The credit card companies notify the credit bureaus of a late payment status and may charge a late fee.Continue Reading
Continued nonpayment of credit cards can result in legal action. Most likely, the credit card company will charge off the account and turn it over to a collection agency to pursue payment.
Consumer credit reports also reflect nonpayments, which lowers credit scores. This can prevent a person from obtaining loans and other credit in the future even if he gets back on track and starts making payments. If part of the payments are made but not all of them, a fee can be assessed and interest rates increased. It is better to talk to credit card companies before nonpayment occurs to work out a possible solution, according to the Consumer Financial Protection Bureau.Learn more about Personal Banking