Stopped paying all credit cards except one. Will that one card default?

Stopped paying all credit cards except one. Will that one card default?
0.0 0.0 0.0 0.0 0.0 0

#1

Due to hardships I cannot pay most of my credit cards except one (plus a loan) that I feel I have an even greater responsibility to pay back due to the amount owed. Would it be inevitable for the card company that I am still paying back to see that I am not paying back my cards with other companies and immediately default my APR or even worse demand to have my loans paid back in full sooner than the repayment term?

“I received advice to either not pay anything back (and deal with what is to come) or pay everything back. Partial payment for one company while not paying others is not the way to go.”

Help!


#2

Hi synrsale,

Thanks for your question. No, as long as you’re paying at least the minimum on that one card, the account is going to remain current (it’s not influenced by your payment behavior on other cards or loans).

However, it sounds like you’re struggling with all your debts, so just paying off one card is not a good long-term solution. Instead of focusing on the card with the biggest amount, consider a holistic strategy to pay off your debt (like the debt snowball or debt avalanche).

Here is an article that will walk you through how to pay off all your debts and help you pick the strategy that’s right for your financial situation.

https://www.nerdwallet.com/blog/pay-off-debt/

Good luck! Feel free to ask follow-up questions.
Amrita


#3

So sorry you’re going through this. Falling behind on bills can be super stressful and scary, especially if you don’t know what might happen next.

As Amrita mentioned, your credit card company can no longer raise your rate if you fall behind on other debts. That practice was known as universal default and Congress banned it several years ago.

Your card company can, however, lower your credit limit, so if you’re staying current on one card just to have access to credit, that might not work for much longer. So unless your hardships are over and you’re able to pay off your cards quickly, it’s probably time to explore some alternatives. Amrita pointed you to a great resource for that. Another article that may help is this one about how to cope when you can’t pay your bills: https://www.nerdwallet.com/blog/finance/how-not-to-pay-your-bills/

Hope that helps and please let us know how you’re doing.


#4

Not to be the bearer of bad news… Fortunately Universal Default is no longer allowed however… what will likely happen is AA and Balance Chasing on the one card thats still current as your score drops through the floor… You might want to revise your strategy and see what other options you have, Some lenders (and you should research this in other forums as well) have very good hardship programs where your lose your cart privs but the interest rate is locked at a much lower rate, even below market rate … Also youll have to find income to supplement this hardship… and reduce expenses)… Problem is oftentimes folks try to stay at the status quo without cutting out things that are really luxuries that they think are necessities… Also the dreaded BK might be on the table… but there are other options first… And whats the large loan for…,.???


#5

Could you further explain what AA and Balance Chasing (lowering credit limit?) refers to?

Also, the loan was a large personal loan under the same card company that I have one credit card with. I am only paying off that one credit card and loan as that appears to be the largest debt compared to the other cards that I have. In a way I am concerned that the largest debt will create unfavorable outcomes down the line compared to the smaller balances that could be either paid off in installment plans after a court case or cleared in a case if charged off to some random debt collection agency that could ignore the debt if I fight it in court.


#6

Balance chasing is the practice I mentioned of a credit card company reducing your credit limit as you pay down your balance.

I’m not sure what you mean by “unfavorable outcomes,” but I would not wait to get sued over your debts before taking action. You’d be smart to have your situation reviewed by a credit counselor and a bankruptcy attorney so you understand your options.