what happens when you stop paying your Credit Card

The good thing about credit cards is that they help you build credit quickly. But they can also land you in massive debt, late fees, and stuck paying them interest for years if you are not careful.

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1. Late Payment on your account and also charge you interest if you carry a balance ( potential interest increase )
- This late fee is usually for around $35 on average
- And the good thing for banks is that they made around 12billion from these sort of fees
- Also from interest they made around a 63.4billion dollars ( a lot of money )

Now the big problem is this:
- It doesn’t feel like it’s a big deal to pay $25 minimum payments and $35 fee and also the interest
- But the truth is that they make 20% in interest from you and you can expect to make maybe 10% from the stock market
- It means that this is a game that when you play it this, theirs is no way you are going to win.

Avoid how:
- If you already got a late fee, you call in and ask for one-time forgiveness and they will forgive it
- And also you always pay your balance in full to avoid being charged interest
- But keep in mind that the average person is still overspending when using credit cards

Tip: also that late payment gets sent your credit score and your credit will get hurt because payments account for 35%. ( I guess that’s how they came up with the 35$ fee ( stays in for 7 years )

Tip 2: if you keep doing this, they will your interest in purchases even more, because you become a high-risk client.

2. Two or 3 More No payments
- They start to block your credit card from being used
- And they will still continue to report the late payments ofcorse
- And also charge you interest and raise it too obviously

Now by this point, you will start getting the Call:
- Hello Tommy you haven’t paid your credit cards in awhile is everything okay and can you make a payments
- Because if you don’t your account will be closed and your credit score will be messed up
- And most people by this point are in the hole.

But this is when you might want to negotiate with them:
- You explain to them that you can't make your payments ( and if they can lower it and make a payments plan without charge interest )
- And now if you are really good at negotiating you might get away owing less money, having a good amount of time to pay pay
- And they will negotiate because the alternatives is to send you to collections and sell your accounts for pennies on the dollar either way

3. 4 late payments or more ( charge off )
- This means you are bad clients and are very unlikely to pay ( back in the day they use to send you to jail)
- But these days you get sent to collections
- Or they might just sue you and try to get wage garnishment up to 25% and that’s not something you ever want on your credit score

And something worst is that:
- Once they charge your account you will receive a notice from the IRS
- Letting you know you will owe taxes on it 1099-c
- And then things start to get tricky

4. Overall by this point these are bad
- Your credit score is trashed, but you can file for bankruptcy if you want ( but that will stay with you forever )
- Or you can settle with collections and then wait for the charges to be removed in around 7 years

But this will make it really hard;
- To qualify for a loan on a house, car, and more.

My suggestions:
- Use a credit card just for automatic bills internet, apple music, and Netflix
- And set to auto-pay and you will build credit
- And just your debit card and cash ( if you need more money you need a better job or to lower expenses )
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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

[Nacho_Cheese]

Don't be like me, slowly snow balled to $30, 000, paying at least $1, 000 a month in MINIMUM payments, now I'm struggling to pay my bills from last month

[fbanda]

Are you kidding me I’ve literally seen people buy houses and new cars like a year or two after bankruptcy. Multiple people! Literally living better than me trying to do the right thing!

[mikecarlton]

Simply, I don't pay. I prefer to get paid in checks. So I just cash them. My stuff is in my kids name, so there's nothing to sue and nothing to garnish.

[Zooviax]

I pray anyone that sees this is successful in life...♥️

[masterbrice]

I'm so happy that I started building credit late in life. I know I missed out on the many advantages of having credit, but my younger self was not responsible or mature enough to understand and handle credit. I was not paying my bills at all because my mother didn't and I thought that was okay because I thought there was no consequences. Now that I know everything I need to know about credit, I raise my credit from poor to fair and now I'm creeping upwards to the 720 range. I want to be completely debt free at some point.

[patrickjohnson]

Dude...what??? I declared bankruptcy in 2006...2 years later my credit score was almost 700...new car...new credit cards ...etc etc... Why are you saying such things...???

[TommyBryson]

almost forgot to mention that potentially once your accounts is charged off, you will get a 1099-c form from the irs, where you might be liable for some of that

[Edvardlarose]

I am not a bot. Look up the FDCPA (15 USC 1692) and the FCRA (15 USC 1681) debt collection tactics are against the law. Calling, mailing, emailing, harassing, reporting negatively and a number of other tactics they use are against the laws above. Report these crooks to the CFPB.

[DebtFreeDad]

The leading system is based of selling people a product when they have limited knowledge.

[cryptoflippodcast]

*You stop paying your credit card and credit score turns to* 💩💩

[qn]

Filing bankruptcy is not all bad. Be sure to get yourself 3-4 secured cc after you filed bankruptcy and pay on time for the next 3 or 4 years after and your credit score will go back to 700 in no time. I have seen many people getting approved for regular cc 3 years after bankruptcy if only they hop on the secured cc train quickly.

[bionicwoman]

Bankruptcy doesn't stay on there forever it's 10 years for chapter 7 and 7 years for chapter 13. Not sure why you said that.

[tearsbeers]

I owe 34, 000 on AMEX, the interest payments are $1200 and I'm on the 29.99% penalty rate. No way to get out of the debt

[younome]

I bought a house this year with a 1, 000$ hospital bill in collections. Been in there for 3 years. Was surprised they dint even bring it up.

[katoadamsii]

Always reassuring to see a being helping others 🖤 nice work brother

[CB-himf]

Senior mom 86 REFUSES to pay hers. She says she doesn't have any. WTH?

[CalebOliver]

CONGRATULATIONS TOMMY ON REACHING 300K

[modernadulting]

When you quit making credit card payments, you can be charged late fees and higher interest rates and take a hit on your credit. If delinquency continues for more than a few months, your account may go to collections or be charged off, and you may be sued.

[moonenergypriestess]

Congrats on reaching your goal of 300k, you deserve it ! :)

[stevenwoeste]

I would disagree with your statements about bankruptcy. I declared a chapter 13 bankruptcy over 4 years ago, and I had no trouble at all getting regular (not secured) credit cards just 4 months after the bankruptcy was discharged (finalized). I have also been able to get an unsecured loan through a local credit union. I now have ample credit, and my credit score has been over 700 for years. And, the bankruptcy process itself was fairly easy and fairly painless; it was nothing like the horror stories I've heard.