ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If you fail to pay the minimum amount due, late payment charges and credit card interest will be applied. Also, certain issuers increase the applicable rate of interest on the credit card in case of missed payments. This will increase the outstanding amount rapidly and let the debt spiral out of control.

Detailed explanation-2: -If you miss payments or you don’t pay the right amount, your creditor may send you a default notice, also known as a notice of default. If the default is applied it’ll be recorded in your credit file and can affect your credit rating. An account defaults when you break the terms of the credit agreement.

Detailed explanation-3: -A default will stay on your credit file for six years from the date of default, regardless of whether you pay off the debt. But the good news is that once your default is removed, the lender won’t be able to re-register it, even if you still owe them money.

Detailed explanation-4: -Can I go to jail for not paying credit cards in India? Legal action can be taken in the court of law for credit card payment default and a civil suit can be filed. Your name will also be a part of the credit card defaulter list in India.

Detailed explanation-5: -Visit the issuer or a debt settlement agency. Explain your inability to make payments via a credit card settlement letter and mention that you’re open to negotiating other repayment terms. Offer a lump sum or inform the issuer of your plans to file for bankruptcy.