Credit cards are a convenient tool, but paying attention to those monthly statements can lead to a financial headache.  This blog will unpack the consequences of letting your credit card debt pile up. We’ll explore how missed payments can damage your credit score, cause credit card defaults, hit you with fees, and even lead to debt collectors knocking on your door. 

But fear not! We’ll also discuss steps you can take to get back on track and manage your credit card debt effectively. So, whether you’ve missed a payment or two or are facing a mounting balance, keep reading for valuable insights to navigate this situation.

The Impact of Credit Card Debt

Credit Card Debt


Credit Score Nightmare

On-time payments are the golden rule of credit card ownership. But missing a payment can seriously damage your credit score, the three-digit number that lenders use to assess your creditworthiness. This score plays a crucial role in your financial life, impacting everything from qualifying for loans (mortgages, car loans, etc.) to the interest rates you’ll be offered.

The severity of the damage depends on the delinquency itself.

A single late payment (30 days past due) might cause a drop of 30-80 points, but the impact can be much steeper for more serious delinquencies. Remember, a good credit score (generally above 740) can unlock lower interest rates, better loan terms, and even insurance discounts.  

Letting missed payments drag down your score can significantly limit your financial options and make borrowing much more expensive.

Fees: A One-Way Ticket to Higher Debt

Missing a payment isn’t just a slap on the wrist; it opens the door to a new world of financial woes – fees. Here are the two main culprits that can quickly inflate your debt:

  • Late Fees: These are the most common penalties for missed payments. While a single late fee might seem insignificant, it adds to your overall balance and can become a recurring expense if you miss multiple payments.
  • Penalty APR: If your payment is particularly delinquent (often 60 days or more late), your credit card issuer might slap you with a penalty APR. This is a significantly higher interest rate than your regular APR, meaning interest charges accrue much faster. This can turn a manageable debt into a rapidly growing financial burden.

The danger lies in how these fees snowball.  You miss a payment and incur a late fee.  If you need help to make the minimum payment, that fee makes it even harder to catch up. With each subsequent missed payment, you’ll face another late fee on top of the growing interest charges calculated at the penalty APR. This vicious cycle can quickly trap you in a spiral of increasing credit card debt.

Collection Calls and Lawsuits (Optional)

If delinquency persists for an extended period, your credit card issuer may eventually sell your debt to a collection agency.  These agencies are relentless in their attempts to collect, and their constant calls can be a major source of stress.

In extreme cases, depending on the amount owed and local laws, your creditor may even resort to lawsuits to recoup the debt. This can result in wage garnishments or even asset seizure, so it’s best to avoid reaching this stage at all costs.

Credit Card Default in the UAE

Credit Card Default in UAE


In the UAE, missing three consecutive monthly credit card bills or six non-consecutive ones qualifies as a default according to loan agreement formats approved by the Central Bank. This can lead to serious consequences. The bank may cash your security cheques and, if there aren’t enough funds, file a case against you. The court could then impose a travel ban and, after 15 days, even an arrest warrant.

However, you do have options. You can approach the court to negotiate a settlement with the bank or start insolvency proceedings. It’s important to note that approval for either option lies with the court, and the bank may still pursue legal action if these efforts fail.

Strategies to Manage Debt

Don’t let credit card debt hold you hostage! Here are some steps you can take to regain control and get back on track financially:

Face the Facts: Analyze Your Debt

Knowledge is power, especially when it comes to managing debt. Take a deep breath and gather all your credit card statements. Now’s the time to get a clear picture of your situation. 

Here’s what you need to understand:

  • Total Amount Owed: This is the big one – the total sum of money you owe across all your credit cards.
  • Interest Rates: Knowing the interest rate on each card helps you prioritize which debts to tackle first. Generally, cards with higher interest rates should be paid off sooner to minimize the interest snowball.
  • Minimum Payments: Understanding the minimum payment due on each card helps you assess your current financial obligation.

Creating a budget is crucial for managing your debt.  List your monthly income from all sources and then track your expenses. This will help you identify areas where you can cut back and free up extra cash to put towards your debt payments. There are many budgeting apps and resources available online to help you get started.

Contact Your Credit Card Issuer

You might be surprised, but sometimes a simple conversation with your credit card issuer can be beneficial.  Explain your financial situation and see if they offer any hardship programs. These programs might involve temporarily lowering your interest rate, waiving late fees, or setting up a payment plan that fits your current budget.

Explore Debt Repayment Options

There are different strategies for tackling debt, each with its own advantages. Here are two popular methods:

  • Debt Snowball: This method focuses on paying off the smallest debt first, regardless of interest rate. Seeing quick progress with smaller debts can be a powerful motivator and help you stay on track.
  • Debt Avalanche: This method prioritizes paying off the debt with the highest interest rate first. While you might not see immediate progress on the balance, this strategy saves you money on interest in the long run.

Building a Budget and Sticking to It

A realistic budget is your weapon against debt.  List all your essential expenses (rent, utilities, groceries), allocate funds for debt payments, and don’t forget to include some savings! Sticking to your budget takes discipline, but remember, every dollar saved is a dollar you can put towards eliminating your debt.


What happens if you never pay your credit card bill?

In the UAE, missing just a few credit card payments can be serious. You’ll face fees, and the bank may sue you, leading to a travel ban or even arrest. There are ways out, like negotiating a repayment plan, but approval isn’t guaranteed.

Can I be jailed for credit card debt?

In the UAE, there is a possibility of jail time for credit card debt, but it’s not automatic. Missing payments can lead to a lawsuit from the bank, and if that includes bounced security cheques, a judge may issue a travel ban or even an arrest warrant.

How long can you go without paying credit card debt?

Avoiding UAE credit card debt entirely isn’t advisable. Missing just a few payments can trigger a default. After a default, the bank has the legal right to sue you, potentially leading to severe measures.

Is non-payment of debt a criminal case?

In the UAE, non-payment of debt can turn into a criminal case, but there’s more to it.  While missing payments itself isn’t a crime, bouncing security cheques due to insufficient funds can be. This could lead to a lawsuit and potentially jail time.

About Author

Hanna Rico

About Author

Hanna Mae Rico is a skilled content writer. With a bachelor's degree in English Language Studies, Hanna has spent over three years working in the digital marketing industry. Her versatility shines through her ability to captivate audiences with lifestyle, travel, and other engaging topics. Her love of written words and her innate ability to transport readers to different places make her a true wordsmith.