Should you really be alarmed if you’re not paying your credit card bills on time? Should you be concerned about paying bills on time or is it something you can just put off for later? Would it really matter if you get in the habit of delaying your credit card payments? To answer these questions, let’s consider the consequences you will be facing if you choose to continue with this habit:

1. Creditors and Collectors Run After You
If you haven’t experienced it yet, consider yourself lucky. Many people with unpaid bills on their account find themselves frustrated, disturbed and annoyed with the fact that creditors or debt collectors call them several times each day to remind them of their bills. This can be a real headache on your part.

Imagine what it’s like to start your day with a creditor trying to make you. Some creditors even do it in a harsh way and many people has complained about creditor harassment. Although the FTC does give borrowers protection against creditor harassment through the Fair Debt Collection Practices Act, it’s best if you can avoid this kind of situation by paying your bills on time.

2. Damages Your Personal Credit Score
This is an obvious consequence of not paying your credit card bills on time. Creditors will report you to the credit bureaus and past due bills and untimely payments will be reflected on your credit report. Everyone must be aware that their total credit score is 35% punctuality of payment. This is why, a single delay on your payment can badly damage your overall credit score.

3. High Interest Rates and Penalty Fees
If you’re a credit card owner, you can easily be stuck in huge debts by not paying on time due to the high interest rates that will be charged against you. Creditors can even increase your APR just because you’re not punctual with your payments. Add the late fee charges and you can only imagine how these additional costs can put you in a bad credit situation instantly.

4. Creditors Taking Legal Action Against You
A creditor has the right to file a legal complaint against you if you defaulted from your debts. The process would be long and complicated but some creditors are willing to go through all these just to punish the borrower.

Obviously, all the above consequences bring unnecessary stress, pain and worries. You don’t have to see yourself go through all these if you take your duties as a borrower seriously. Don’t risk paying for high interest, being penalized, damaging your credit score, or being sued by your creditors. Avoid such frustrating and humiliating incidents being aware about the debts you owe and by paying your bills on time.

If you notice that you’re having difficulty in controlling your spending and that your debts are building up, then don’t wait until the problem gets worse. Seek help. Go to a government accredited credit counseling agency to help you find a practical solution to your debt problem.

When any debt goes past 90 days late, it goes into collections. For secured debt, legal action will likely commence very shortly thereafter. Once a repossession or foreclosure has occurred, any deficit is treated as unsecured debt.

For unsecured debt, the average collection rate is 15 to 20 percent of the total debt when a debtor is 90 days late or more. Since creditors know this, they will do everything they can to settle the debt at this crucial point. At this juncture, they’ll try to collect for 90 more days and may elect to use an outside collection agency.

If they are unsuccessful after 90 additional days, then they will likely turn the debt over to a collection agency and/or sell it to a third party. They really don’t want this, since their chances of collecting at this point are minimal and whatever is collected must be shared with the agency; often 50 percent will go to the collector. Your chances of negotiating a good settlement just before the debt goes to an agency are quite good, but don’t be alarmed if you can’t settle before this happens.

Bank credit cards are the most common form of unsecured debt, and after six months these creditors will charge off (write off) the debt in order to obtain a tax credit on the loss. They’ll continue trying to collect thereafter and hope that negative credit reporting will eventually force a debtor to pay up. Such debts are more likely to be sold to a third party after six months of delinquency.

Many “credit repair experts” claim that collection agencies are far easier to deal with than original creditors, since they’re far more accustomed to reducing debt and wheeling and dealing. I don’t find this to be true at all, and if there are any notable differences in what one will do over another, I believe it’s more a function of time and simple economics. Creditors can charge off debt and recover part of it in the form of a tax write-off. Debts often get sold after six months, and buyers will purchase it for pennies on the dollar. As time passes and a debt approaches the statute of limitations for collections, any debt holder will become more flexible. And, besides, collectors from agencies are usually far more unruly anyway, which can make them more difficult to deal with.