Unpaid Credit Card Debt is a ticking time bomb. The longer you ignore it, the bigger it will get. Eventually, it will jeopardize your financial well-being, and become a nightmare to deal with.
Yet, it is not uncommon for credit cardholders to skip paying their dues altogether. But banks and credit card providers have a protocol when dealing with such cases. Here’s how the situation will most likely play out…
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You Will Get Calls From Debt Collectors
If you’ve been ignoring the Credit Card bills and payment reminders from the bank, chances are you’ve already heard from debt collectors. These debt collectors will contact you on behalf of the bank and will keep pursuing you till you repay your outstanding dues.
When it comes to how debt collectors handle debt recovery cases, there is often a fine line between being persuasive and downright threatening – Unfortunately, this line is often blurred in such cases. It’s best to reach an agreement with the bank before the calls from the collectors start pouring in.
Your Security Cheque May Be Deposited
It is a common practice for banks to take an un-dated security cheque from you at the time of a Credit Card application. The bank has all the right to deposit this cheque in case it is not able to recover the outstanding amount from you. But what happens if the cheque bounces? Under the revised legal regulations pertaining to this, you won’t face a jail term, but instead will be liable to pay a fine.
There May Be A Police Case Against You
Credit card debt that’s been left unpaid for too long can come back to haunt you in the form of a police case. And since police and immigration systems are connected, you risk getting stopped at the airport at the time of exiting or entering the UAE.
[Related: Thinking of paying the minimum 5% on your credit card? Think again…]
However, if you left the country with a Credit Card debt that’s yet to be repaid, it is not only morally right that you pay it off even from outside the UAE, but doing so will also help you avoid getting hounded by local debt collectors and being detained at the airport if you ever come back to the country or are transiting through it.
Your Credit Report & Credit Score Will Be Damaged
Not only will your Credit Score take a big hit, but the unpaid Credit Card debt will jeopardize your chances of securing additional debt in the future too. It is unlikely that any bank would be willing to offer you a new loan or Credit Card with a debt default showing up on your Credit Report.
A Word To The Wise – Credit Cards should not be treated as a free-pass to spending money that you can’t see yourself repaying, given your financial resources. It’s best to stay away from Credit Cards in the future, if you think the temptation to overspend is too much for you to handle.
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