Debt of Does your credit card expire? Find out!

Credit cards are still one of the preferred means of purchasing among all Brazilians. Offering unique conveniences and the ability to get what you need by paying in installments, they have grown significantly in recent years.

But along with the growth of credit cards, default rates have also increased. Today, a large portion of the population has already defaulted on their credit card bills. And at this point, a question arises: does credit card debt expire?

In this article, we'll provide you with a complete guide on credit card debt and explain whether credit card debt expires. Stay tuned for information and practical tips to help you eliminate your debt!

Does credit card debt expire?

Whenever we talk about credit card debt expiring, we imagine that after a while it should disappear or stop being charged. But what actually happens is quite different.

After five years of debt, according to the law, the person's name ceases to appear in the SPC, that is, the name that was dirty becomes "clean" and the company can no longer put the person's name in credit protection agencies.

But that doesn't mean the debt is gone.

In reality, creditor companies are prohibited from re-registering the debtor's name with credit protection agencies. However, this prohibition does not prevent the credit card issuer from collecting payments on its own or through contracted third parties.

Therefore, it is essential to understand that, even after the debtor's name is removed from credit bureau records, the debt remains valid and the creditor has the right to seek legal means to recover the amount due.

Why does credit card debt expire?

There's a lot of talk about credit card debt becoming obsolete. But do you know why this happens?

Credit card debts are common. This makes them considered "common debts." According to current legislation, they are time-barred after a period of five years. However, it's essential to understand that, even after the statute of limitations has expired, this situation can have financial and legal consequences.

Although the statute of limitations limits the possibility of legal collection, it's important to note that the negative effects of debt don't disappear automatically. You may still be subject to rising interest rates, additional charges, and restrictions on your credit history, which may affect your ability to obtain future loans or favorable financing terms.

Furthermore, the statute of limitations does not guarantee immunity from potential lawsuits. Depending on the circumstances and the amount of the debt, creditors may seek legal action to recover the amount owed, even after the statute of limitations has expired.

After the card expires, can I get another card?

When your credit card debt expires, or even while you have it outstanding, you have complete freedom to try another credit card.

However, even if your debt is time-barred, it's important to note that companies will have access to your payment history, which may make it difficult to approve new requests.

Although the statute of limitations limits companies' ability to take legal action to recover the amount owed, they can still consult your credit history. This history reflects your past financial behavior, including late or delinquent payments. As a result, companies will consider this information when evaluating your future requests, such as loans, financing, or credit applications.

Having a negative payment history can be a hindrance when seeking credit in the future. Companies may consider you a higher risk of default based on your past information.

This may result in higher interest rates, lower credit limits, or even denial of your application.

What happens if I don't pay my card bill?

Many people wonder about paying their bills and what happens if they let their credit card debt lapse. Here are some of the consequences of doing so:

Payment with a high interest rate

When a credit card is not paid, the issuer usually applies a monthly interest rate that is generally around 15% on the total amount of the charge.

It's important to note that, while the card won't be blocked immediately, you'll still be able to use the available credit limit during the first month of arrears. However, it's crucial to be aware that continued use of the card without proper payment will result in even greater interest accrual and may lead to more severe consequences.

Credit card blocked

When you enter the second month of late payment on your credit card, it will be completely blocked, and you will need to pay the full outstanding amount to reactivate it.

When a card is blocked, it cannot be used to make new purchases or financial transactions. Blocking is a measure adopted by the card issuer to restrict access to credit due to non-compliance with financial obligations.

To unlock the card, you'll need to pay off the full amount of the accumulated debt. Only after payment is made and acknowledged by the issuer will the card be released for use again.

Score gets lower

When your credit rating is negatively impacted, it's important to note that one of the consequences is a decrease in your credit score. This score is used by financial institutions and companies to assess your credit profile and determine the risk of granting loans, financing, credit cards, and other financial products.

A lowered score means your financial reputation has been negatively impacted, making it more challenging to obtain approval for financial products. Institutions consider a negative score as a sign of increased risk, which can result in higher interest rates, lower credit limits, or even application denial.

Legal action

The credit card issuer has the right to seek legal redress through legal action to recover the unpaid amount.

When all attempts at communication and negotiation fail, the issuer may take legal action to recover the outstanding amount. This may result in a lawsuit, in which the court will review the case and decide whether payment of the debt is mandatory.

Can credit card debt be collected in court?

If the cardholder fails to make the due payments, the card issuer has the right to resort to the judicial system to seek recovery of the outstanding amount.

By filing a lawsuit, the issuer seeks a legal decision ordering payment of the debt. If the court finds the lawsuit admissible, a judicial enforcement order may be issued, allowing the creditor to take legal action to collect the amount owed.

Legal action may result in legal consequences for the debtor, such as seizure of assets, freezing of bank accounts, or other measures provided for by applicable law. These actions aim to ensure compliance with the financial obligation and protect the creditor's rights.

Does credit card debt seize assets?

Credit card debt alone is not sufficient to automatically authorize the seizure of assets. Seizure of assets is a measure that can be adopted in judicial execution proceedings when there is a court decision favorable to the creditor and other forms of debt repayment have been exhausted.

In the specific case of credit card debt, before assets can be seized, the creditor must file a lawsuit and obtain a favorable decision. This decision will authorize the enforcement process, which may include asset seizure as one of the measures to ensure payment of the debt.

How long does it take to get your name dirty with a credit card?

The time it takes for your credit card debt to be blacklisted can vary depending on several factors, such as the card issuer's policies, the cardholder's payment history, and the actions taken by the creditor.

Typically, after a credit card bill is missed, the card issuer initiates the collections process, which may include issuing payment reminders, written notifications, and phone calls. These steps are designed to remind the cardholder about the outstanding debt and encourage payment.

If the cardholder fails to regularize the situation and remains in arrears, the issuer may decide to blacklist the debtor. This occurs when the debt is registered with credit protection agencies, such as Serasa and SPC, and appears on the individual's credit history.

Typically, the negative listing occurs after a period of approximately 30 to 60 days of default.

I can't pay my card bill, what should I do?

Everyone has had problems with credit cards and paying their bills. Therefore, it's not enough to know if your credit card debt will expire, if you'll be listed as a defaulter, or what might happen if you don't pay. You need to know what to do if you have credit card debt.

That's why we've brought you tips to help you get organized and pay your bill, eliminating your debt.

Try paying your bill in installments

Instead of not paying your credit card bill, one alternative is to pay it in installments, so you can better organize your payments and avoid having debts in your name.

By opting for the minimum payment, you automatically enter revolving credit, and the remaining balance must be paid on the next bill. So, it's worth considering whether it's a good idea or if it's better to pay in installments.

Assess your financial situation

If you're already in debt and don't know what to do, the first step is to analyze your financial situation.

Conduct a thorough analysis of your income, expenses, and debts. Understanding your current situation is crucial to making the best decisions.

Prioritize payments

To be able to pay off your credit card debt, you must prioritize your bill payments.

Identify your most urgent and important bills, such as rent, electricity, and water. Then, consider how to pay your credit card bill.

Contact the financial institution

It is essential that you are honest with the company that offered you the credit card.

Don't ignore the situation. Contact your card issuer and explain your difficulty. Some companies offer renegotiation options, such as installment plans or interest reductions.

Negotiate interest and charges

If the card issuer doesn't offer a suitable solution, try negotiating the interest and fees on the debt. Some companies are willing to reduce these amounts to facilitate payment.

Cut unnecessary expenses

This is a way to organize yourself to have better financial control.

Conduct a detailed analysis of your expenses and identify potential savings. Eliminate unnecessary expenses and allocate the money to paying your bill.

Look for extra income

Consider ways to increase your income, such as temporary work, freelancing, or selling items you no longer use. Use these extra funds to pay off your credit card debt.

Avoid making new purchases

While you're struggling financially, avoid using your credit card for new purchases. This will prevent your debt from growing even further.

Consider loan options

In extreme cases, when all other options have been exhausted, you may need to consider a personal loan to pay your credit card bill. However, be careful with interest rates and evaluate whether this is truly the best solution for you.

Make a financial plan

Establish a detailed budget to manage your finances. List all your expenses and income, and closely monitor your spending. This will help prevent future problems.

Frequently asked questions

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