Effects

• Credit card companies will begin contacting you via telephone to try to get you to make a payment once your due dates have passed. While they may call you at your place of business, the Fair Debt Collection Practices Act disallows them from discussing the reason for their call with anyone other than you or another recognized account holder on the account. Late fees typically are assessed, and vary from credit card to credit card. Your interest rates may also be raised, not just on the credit cards you have stopped paying, but on others, as well. Credit card companies and other creditors frequently keep tabs on your credit report. As your credit card nonpayments are reported, even creditors that you have continued to pay may lower your credit limits or raise your interest fees in response to your actions.
  
  

Time Frame

• After your credit card payments are 30 days late, credit card companies consider them to be delinquent, and delinquencies (frequently abbreviated as DQs) are reported to the three national credit reporting bureaus (Experian, Equifax and TransUnion). Late fees are usually assessed if your payments are even a single day late. However, if you have a long and shining history of making every payment on time, you may be able to get your credit card company to waive the late fee if you can convince them it was a simple oversight on your part. After 180 days of nonpayment, credit card companies will consider your account "charged-off," which means they will close it and sell the debt to a debt collection agency. This new collection account will be reported separately on your credit report, and any charged-off credit accounts will be reported, as well.
  
  

Considerations

• Once you have stopped making payments on your credit cards, creditors may be willing to offer you a settlement deal to recoup some, if not all, of their money. The "New York Times" has reported that since economic times have become so rough, credit card companies are more willing to make such overtures than they may previously have been. Be aware, however, that such action will show up on your credit history as a settlement, and will negatively affect your credit score.
  
  

Warning

• Different states have different statutes of limitation on how much time credit card companies have to sue you to recoup their money, typically 3 to 5 years. You can be sued within the limitations of your state, which can result in missed work time due to court dates and legal fees that may be assessed on top of the money you owe your credit card companies.
  
  

Prevention/Solution

• If you find that you cannot make payments on your credit cards, call your creditors as soon as possible to explain why. If you have a stellar history with your credit card companies, ask for an interest rate decrease or a change in payment due date to try to accommodate your circumstances. If you are currently undergoing hardship, such as a job loss or sudden medical problem, explain that to your credit card company. Some creditors have plans in place to help people going through hardships so that they can make minimal payments and still retain good credit. The better your credit history is prior to calling your creditors, the more leverage you have to try to work out things in your favor.