What is a default on a credit card?

A default on a credit card is when a card holder fails to make the required minimum payments on their credit card for an extended period of time. Credit card companies will usually give the card holder a grace period of up to 30 days of when the original payment was due before they announce the card to be in default, but this will vary depending on the company. Once a credit card has been reported as defaulted, the credit card company will typically send the account to a debt collection agency. At this point, the card holder will see a significant decrease in their credit score and will be unable to use the card until the account is brought back into good standing. In Montana, the law states that if a card holder is more than 90 days late with their payments, the card issuer may report the default to the credit bureaus. It is important to note that if the card holder does make up the missed payments and their account comes back into good standing, the credit card company may still report the default and late payments to the credit bureaus. Credit card defaults can have serious repercussions, such as lower credit scores, difficulty securing future loans, and charges from collection agencies. Therefore, it is advised for credit card holders to pay their bills on time, so as to protect their credit and financial standing.

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What is a default on a credit card?

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