For those of you carrying around credit card debt and are feeling the weight of the world bearing down on you, please heed this advice if you don’t listen to anything else: Never run away from your credit card debt.
By run away, I mean completely pretend it doesn’t exist, stop making payments, hide from the companies, whatever. And for those of you thinking of filing bankruptcy, please put that thought out of your mind, unless situations outside of your control caused the debt. Medical bills and other emergencies have their own set of circumstances that provide fodder for further discussion. But when it comes to credit cards, the problems you will cause by ignoring your debt will only be making your situation much worse. So, what exactly could happen as a result of not paying your bills?
The least harmful thing that will happen to you is that your phone will never stop ringing. They will find you, no matter where you go, and the debt collections people will hound you at work, home, school, etc. Sure, there are laws in place that say they can’t call you at certain times or at certain places, and they are not supposed to be abusive. But they are and they will be, and they will not stop.
Your credit score will take a serious hit and this will affect much more than just a loan rate. It might make it harder for you to get a job, as some employers check credit reports now. It will increase your auto and other insurance rates, as they too look at your credit report. The interest on your unpaid balances will skyrocket to never before seen rates, which will add many more years to your eventual payoff. And that’s not just on the one card you might be past due on; it’s all of them.
Your paycheck might start to shrink on a weekly basis. There is really nothing to stop a company from garnishing your wages to help pay back your debt. And working all week to see a $53 paycheck will not be a good time.
You will never get another loan for anything. Well, I take that back…some loan shark somewhere might loan you some money at 39% interest so you can get a car…turning that $5000 Honda into a $45000 Honda in the blink of an eye. But you will not get a mortgage loan or a regular auto loan while this black mark is following you around.
Interested in renting a house or an apartment? You can forget it, because as soon as the landlord sees your credit report, I highly doubt they will be willing to take the chance that you won’t be able (or willing) to pay the rent each month.
On a personal note, your relationships will suffer. If you are being constantly hounded by bill collectors, unable to pay for groceries and gasoline, have to ride your bike on dates and keep having your credit cards declined at dinner, you can just about forget about ever getting a date. And if you are married, you might soon be on the road to divorce, which especially for guys, can just add a huge pile of debt onto your already existing debt.
These reasons you should not ignore credit card might seem harsh, but in reality, these are the types of things you are facing. Debt reduction through small payments, borrowing from family members, communicating with your creditors…these are the only true ways out of your debt. You probably created the debt and had no problem doing it. At some point, you have to pay it back…and hiding from them is not going to save you. It will only make it worse.