![]() ![]() But make sure to weigh up the pros and cons carefully. This allows you to pay off your debt interest-free for a period of time, which could make it more manageable. Consider a credit card with a 0% balance transfer offer – one option could be to transfer your existing credit card debt to a credit card with a 0% balance transfer offer.Read more: Debt collection guidelines for collectors and creditors Tips to stay ahead of your credit card debtĭefaulting on your credit card can have long-lasting consequences, so it’s important to stay on top of your credit card debt and avoid missing your repayments. If a debt collector is harassing or intimidating you, you can send a complaint to the debt collector or complain to the Australian Financial Complaints Authority. You should be treated in a professional way and debt collectors are not allowed to harass or intimidate you. ASIC’s Moneysmart also recommends replying in good time to their calls or letters, considering a payment plan if you can afford it and letting them know if your contact details change.ĭebt collectors must respect your right to privacy and there are restrictions on how and when they can contact you. If you are contacted by a debt collector, you should try to cooperate with them while also being honest about your financial situation (including other debts you have). In this instance, it’s important to understand your rights. If you default on your credit card repayments, you may be contacted by a debt collector. It notes that once you give a hardship notice, your credit provider must stop further enforcement or legal action until it responds (unless it has a court judgment). You can speak to a financial counsellor by calling the National Debt Helpline on 1800 007 007. You can also contact a free financial counsellor for help. If you are struggling with credit card debt, it’s important to contact your credit card provider and see if you can come to a financial hardship repayment arrangement. ![]() It could also start legal action to recover the money you owe. If you fail to make your credit card repayments over a period of time, the Australian Banking Association says your bank could cancel your credit card and, in rare circumstances, it may sell your credit card debt to a debt collector. Additionally, if you are able to pay other loan or credit products on time, this could help reduce the negative impact of the default on your credit report and score. However, if you pay the money owed, this will be noted on your credit report. You can’t get rid of a default on your credit report. This can have a negative impact on your credit score and can make it harder for you to get a loan or credit in the future. As we’ve mentioned, a credit card default will stay on your credit report for five years. ![]() What happens when you default on your credit card?ĭefaulting on your credit card can have serious consequences. Serious credit infringements stay on your report for seven years. Providers can report a serious credit infringement if you owe a debt and the provider hasn’t been able to contact you for at least six months and they think you don’t intend to pay the agreed amount. If your payment was less than 14 days late, this won’t be recorded on your report, but you may still be charged a late fee by your credit card provider and lose any interest-free period that your card has.Īnother type of late payment is a serious credit infringement. This will stay on your report for two years. If you make a credit card payment more than 14 days after the due date, this can be listed as a late payment on your credit report as part of your repayment history. It’s worth distinguishing credit card defaults from other types of late payments. Credit card defaults will stay on your report for five years. In the second notice, your provider should let you know that if you don’t make a payment, the credit provider will disclose this to the credit reporting body. Your credit card provider must also have sent you two separate notices about the overdue payment. You will have defaulted on your credit card if your payment has been overdue for at least 60 days and the overdue payment is $150 or more. Are you at risk of falling behind on your credit card repayments? If you are, it’s important to understand the consequences of defaulting on your credit card. ![]()
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