If you have Next credit account or catalogue bills looming yet can’t afford to pay it, you will be issued with late fees. Your interest rate will also rise and your credit score could be tarnished. The longer you continue to avoid repayments, the worse the situation will become and the higher the fees will be.
If you regularly continue to avoid repayments, your credit card is likely to be frozen. This is when your arrears could be auctioned off to a third party collection company. Despite buying this debt for a fraction of the price, the collection company will still charge you full whack, and often an abundance of other additional fees on top.
This is when speaking to a financial adviser is a must. They will be able to tell you what to say to a collection company, including asking them to supply your original statement without the fees they have added on top. If they refuse to supply these details, they could be in breach of certain laws. If so, you may be able to write your payments off entirely.
Used correctly, credit cards can be a godsend, especially for those waiting on a big payment. Taking out a card from credit reference agencies can help them to tide over the months in between. However, if you use them with disregard and fail to pay your credit card balance, they can be an extremely expensive way to lend, often costing you more money in the long run.
This is especially the case if you are subject to late fees and high-interest rates on your credit card balance. It may be too late to consider this now, but going forward, try to only ever take a credit card out if you know you can make the repayments. Use it as a safety net if needs be, just don’t use it as a form of income or a bank!