credit card debt

Credit Card Debt: Can You Go to Jail for Not Paying Your Credit Card Bill?

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Millions of Americans have huge credit card debt. It’s one of the biggest forms of debt, right after mortgages and student loans. The average American household can rack up credit card debt as high as $16,000. And thanks to inflation and the increasing cost of living, it’s only expected to go higher.

Many people have their own reasons for incurring debt. It may seem impossible to pay off a high credit card bill, so some cardholders may think of ways to avoid paying. Some may even go so far as to ignore their debt for as long as possible.

But is this even legal? What happens if you don’t pay your credit card bill? Let us explain.

Your Debt Will Grow & Affect Your Credit Score

By ignoring your debt, it isn’t going to just magically go away. Instead, the interest and other penalties will accumulate, making your debt grow bigger. And aside from the fact that you legally have to pay that debt (more on this later), that debt will reflect badly on your credit score.

What’s a Credit Score?

To put things into perspective for those who don’t know, your credit score is a number that rates how reliable you are in terms of paying off credit. The higher your score, the better you look as a borrower. Your score is based on several factors, including your outstanding debt.

People with high credit scores are eligible for better credit opportunities like credit cards or low-interest loans. Banks and lenders see high credit scores and are willing to give better deals because your credit score suggests that you are likely to pay back your loans on time.

Those with low credit scores, on the other hand, are seen as a higher risk of not being able to pay back credit card debt or other loans. This means some types of loans will be closed to you, while your only options are high-interest loans because your lenders will want to recoup as much money as possible in case you default before paying off your debt.

Your credit score isn’t just limited to affect your ability to take out loans. You can also be refused by landlords to rent out properties because your credit score indicates a risk that you won’t pay rent on time.

Credit scores can even affect your job prospects. Potential employers won’t see your credit score, but they can see your credit report. Almost half of all employers run financial background checks as of 2018 for three possible reasons:

  • It’s inadvisable to hire someone heavily in debt to be in charge of the business’ finances or inventory;
  • It’s a bad idea to hire someone for a position that handles a clients’ money (e.g. accountant, bank teller, cashier, financial advisor);
  • Being heavily in debt is a sign that a person may be irresponsible, unorganized, or unable to fulfill promises.

So, as you ignore your credit card debt, it will only continue to grow. And the more it grows, the worse your credit score will be. It’s not illegal to have a poor credit score, but it will close so many doors for you in terms of financing, rental properties, job opportunities, and more.

Will My Credit Score Get Better If I Pay My Debt?

Unfortunately, even if you do pay your credit card debt, it won’t stop affecting your credit score until after seven years. So if you have racked up debt that has destroyed your credit score and paid for it today, it will continue to affect your credit score for the next few years.

credit card

What Happens If You Don’t Pay Your Credit Card Debt?

Your credit card comes with a certain credit limit. After your debt goes beyond that limit, your bank or credit card provider will start taking action against you should you miss a payment or refuse to pay your debt. As a creditor, your bank has the right to sue you for unpaid credit card debt.

Debtor Prison: No, You Cannot Go To Jail for Credit Card Debt

As early as the 18th century, the United States had buildings that were known as “debtor prison.” These were actual prisons reserved for people who could not pay their debt. While imprisoned, these prisoners had the option to pay off their debt through labor or had someone on the outside do it for them.

Fortunately, none of these prisons exist in the United States anymore. However, the term “debtor prison” was still used to describe prisoners who went to jail because they couldn’t afford the fines they had to pay.

For credit card debt, you cannot go to jail for it. The term debtor prison is used only for those who cannot pay fines and penalties or those who refuse to pay taxes or child support. But since credit card debt is a form of “civil debt”, you cannot go to jail for failing to pay your due.

Debt Collectors

After some time, your credit card company will transfer your account to a credit card debt collector. This is a third-party organization that specializes in trying to get most or all of the debt back. Your account will usually be sent to collection 60 days after your missed payment.

Debt collectors will try to contact you through various methods: they can email you, send you letters, call you, or even message you on social media or visit your home. There’s a legal limit debt collectors have to follow on how often they can contact you. They also cannot threaten you with imprisonment: as mentioned earlier, you cannot go to jail for an unpaid debt.

Legal Action

If trying to contact you doesn’t work, they can sue you for failing to pay. You can’t go to jail, but depending on the state you live in, the courts may require you to give up to a fourth of your disposable income to the collector until your debt is paid.


Unlike loans, credit cards usually do not require collateral. If your debt is high enough that it is of equal value to a high-value asset, collectors can sue for the right to repossess any asset under your name.

If it is a car, they have the right to take it despite your protests as long as they have the court’s approval. And if it’s a house, they have the right to foreclose your home. These assets will be sold at auction and the money made from that purchase will be used to pay off your debt.

So, to sum it all up, here’s what will happen if you don’t pay your credit card debt:

  • Your credit card company will give your account to collectors
  • Collectors will aggressively try to pursue you as much as the law allows
  • If you still do not pay your debt, collectors can go to court to find a remedy
  • Either a part of your wages will be deducted until you can pay your debt, or your assets will be taken and used to pay for them

man checking debts

Avoiding the Debt Collector (& Why This Is a Bad Idea)

Some debt collection agencies may seem very aggressive when trying to get you to pay back your credit card debt. There are regulations overseen by the Federal Trade Commission about how far collections can go to try to contact you, so if you feel like they are going too far, it’s important to know your legal rights even if you’re in debt.

This includes the right to privacy, negotiations, and reasonable communication. If they post about your debt on social media for everyone to see or call you non-stop outside of business hours, this is in breach of regulations and you can complain about it.

They may seem aggressive, but debt collectors are just doing their job. Ignoring them the same way you try to ignore your credit card debt is a bad idea. Be upfront, let them know how much you can afford to pay, and cooperate. Collection agencies are trying to recover as much of your debt as possible, and working with them could result in some of your debt being forgiven.

What Can I Do to Soften the Blow of Credit Card Debt?

First of all: don’t ignore your credit card debt. It’s still going to be there, and it’s only going to get worse if you don’t do anything about it.

  1. Contact your credit card company. If you know you’re going to miss a payment, let your credit card provider know. They may have contingencies for those undergoing hardship so that repayment can be more flexible but also manageable. Take note that not all providers are required to do this, but it doesn’t hurt to ask.
  2. Debt settlement. The first time debt collectors call, they may offer a one-time payment settlement, which is an amount of money slightly lower than your total debt. If you can pay this, they will consider your debt settled.
  3. Consider debt relief. If you really can’t afford to pay your debt, debt relief companies can help you negotiate your debt. However, they charge for their services, so consider this as a last resort.


It’s never a good idea to ignore or refuse to pay your credit card bill. Because either way, it will not disappear or be forgiven regardless of your circumstance. If you do, it will affect your credit score and you may even risk losing your assets.

Instead, contact your credit card company or the collection agency responsible when you know you’re experiencing hardship. This can help you try to negotiate better payment plans or a part of your debt forgiven.

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