What Will Happen If You Do Not Pay Your Credit Card?

Missing a payment on your credit card happens to even the most prudent of spenders. But what will the bank do if you've missed more than a month's payment?

When in a financial jam, we have to prioritise how we spend our money. Losing a job, business cash flow restrictions or many other financial tough luck situations may arise. In cases like these, we tend to prioritise paying our mortgage or rent; our hire purchase (car loans) and other necessities before we finally pay off our credit cards. Generally, the higher the essential need, the higher most of us prioritise payment.

Whilst it is fine to pay the minimum payment when you can’t manage the full sum, there may be times finances are so tight we are not able to pay even that. But what will happen then? Here’s a peek at what may likely happen.

The First Thirty Days

Missing a payment for a month or being a couple of days late can happen to the best of paymasters, upon the first month of missing a payment, the bank's credit card department would call to remind you to make payment. You will be charged a late fee on top of the interest on the outstanding amount and a note will be added to your CCRIS (Central Credit Reference Information System) banking history showing an outstanding of one month.

It’s wise to pay up by the first month because as time passes, credit collection methods employed by the bank will get more rigorous.

Between Thirty to Sixty Days

If payments are not made when the second month due date arrives, you will start to receive written letters from the bank along with phone calls as a second reminder. This would include the previous total (outstanding amount, interest and late charges) and any new charges as well as the additional interest and late charges for the second month.

There will be a new minimum payment that would need to be made to ensure the account is regulated back to normal.

Your CCRIS score at this point would show an outstanding of two months which would be considered a bad thing to have on record. The bank will also block your card to stop any further charges.

If you are unable to make the payments once it has gone beyond the thirty to sixty days, it would be advisable to negotiate with the bank to convert the debt into a term loan or any other similar arrangement to make payments affordable over a period of time.

Depending on the bank's procedures, some may be willing to negotiate a term loan before it falls into the hands of their a the debt collection agencies.

Sixty to Ninety Days

If you are still “forgetting” to make the payments at sixty to ninety days, you may want to see a doctor on how forgetful you are getting.

At this point, the credit card will be frozen until an agreed sum of payment is made. However if payments are still not made, the account is then moved over to the collection centre of the bank. An account is moved over to this department when it is difficult to recover before it is labelled as a bad debt or deemed non-recoverable.

The collection centre then sends out a legal letter (“letter of demand”) which would demand that the entire sum being owed to the bank be paid back. The charges to issue this letter of demand may be borne by the customer depending on the bank's procedures and regulations.

At this point, if you are still unable to settle your debt and the bank refuses to convert your debt into a term loan, we strongly suggest you contact AKPK. The debt management agency will be able to step in and help you put an end to your debt woes.

Beyond Ninety Days

After 90 days, depending on the amount owed, the bank may choose to outsource the recovery to a debt collection agency. The collection agency would be given a time line to make their collections from the customer.

It is important to know your rights as a consumer when dealing with such agencies. These agencies are not allowed to harass you nor physically harm or threaten you in any way. You may obtain some information on the prohibited business conduct from Bank Negara's website.

Final Stand

In the rare case where a debt agency was not able to collect after the stipulated time given, the bank would consider legal proceedings. Typically, this is when they have exhausted all other resources to collect and takes the debtor to court. Once you have been issued a court summon, it is often when you can pretty much say goodbye to any further financing from any bank. You will also have your record added into the CTOS system.

At the point of litigation, it is too late to approach AKPK (you should have done that earlier!). If there is no option or resolve that can be offered by the AKPK, the possibility of liquidating assets and filing for bankruptcy may be your only option and permanently damages your credit score.

Bankruptcy also bars you from leaving the country and may cause you to be unemployable among many other issues that go along with it. Do note that you can only be declared a bankrupt if the amount owed to the financial institution is a minimum of RM30,000. You can find out more about bankruptcy in our previous article on the topic.

Time Overdue Action Taken
Thirty Days Charges – (Outstanding + Interest + Late Payment Fee); CCRIS would reflect a late payment of one month; Friendly service call from the banks to make payments
Thirty to Sixty Days Total first month charges + Second month charges (if any) + Interest + Late Payment Fee; CCRIS would reflect a late payment of two months; Letter from the bank to make payments; Card will be blocked
Sixty to Ninety Days Account gets transferred to Card Collection Centre; Letter of demand is issued
Beyond Ninety Days Bank may outsource to debt collection agency
Final Stand Bank may choose to take you to court which could lead to bankruptcy (provided amount owing is more than MYR 30,000); record added in CTOS

If you are already saddled with a considerable amount of debt, do not wait until they have issued you a court summon to approach AKPK. It would be advisable to obtain some form of help or counseling with AKPK once you feel the debts are a little out of control and may need some help or advice on how to restructure them.

Next time you choose to skip out on a credit card payment to go on holiday, buy a new phone, or anything else instead of making your payments, consider the repercussions that could follow.

Do note that procedures for recovery and debt collection will vary from bank to bank but these are the general practices.

*Image sources: Image 2 from Fin Tips; Image 3 from tweakyourbiz.com


Agree or disagree with this post? Questions? You also have your word!

  • J

    So I am assuming (based on this article) that anything after the final stand is bad and therefore means that I will never be able to get my credit report back to good health again? Or will I still stand a chance to negotiate with debt collectors to pay my loans & credit cards again? Because it's technically not possible to be able to settle the full sum if I'm in a financial jam.

    • RinggitPlus

      Hi J,

      It's quite difficult to negotiate with debt collectors, but if you can work something out, it's not impossible.
      We recommend you be in contact with AKPK if you're in dire financial straits to help you out.
      Hope this helps!

    • imdeok


      I owe Uob bank last understanding of my credit card was 7600 last 4 years ago. I cant afford to pay it off. Then last year they offer me a discount 7900 to settle the card. Eventually i dont have that much at the moment. After 1 years, I have some money and want to do settlement so i call the bank back to check the amount and is hit up to 16k. I ask them ask is the amount if i willing to do one shot settlement. At 1st they request me to pay 14,000 ++. So i telling back them the amount was so high and i cant afford on that amount then i tell them back last year offer was lower than the offer they give me now. The uob collection department ask me how much i can afford to pay off. I answer them 7900. They said need management to approve the case and will call me back later. After few minutes they call me back and said the amount cannot be approve, so they ask me pay 11,000 instead 16,000. I refuse, i tell them max i only can afford 8500. They said cant because bank already issue legal summon on me and they said they already freeze my account. But when i check my account there is no such things they freeze my account. Just want to ask some opinion in this case can i still nego with them to agree the amount i can afford to pay?

      • RinggitPlus

        Greetings, imdeok.

        What you can do right now is to contact AKPK for advice on negotiating with the bank. Don't worry, the consulting service is free of charge https://www.akpk.org.my/.

        Thanks for the question and we hope this help.

      • KRS

        My credit cards are blocked due to overdues and now am unable to pay online using internet banking. I am trying to reach banks to give me insight on procedures to pay, but just want to check from you all if there is any way to pay the banks?

        • RinggitPlus

          Hi, KRS

          We are sorry to hear about the situation. Currently, each bank has its own procedure regarding settling debts if it has barred you from using online banking. Most likely, this will require you to head to the bank and settle the debt. So, what we would suggest is to first contact your bank, followed by contacting AKPK for advice.

          Thanks for the question and we hope this helps.

        • Jay

          I read this in an article at another site

          "In Malaysia, under the Limitation Act 1953, there is a time limit in which a creditor can take legal action against a debtor.. This means companies must initiate legal claims within a certain time frame. After that time frame has passed, a borrower is no longer obliged to repay their debt. The time frame is 6 years from the date of providing the loan, after which companies can no longer take any action."

          So does that mean the loan is considered forgiven after the 6 years statute?

          • RinggitPlus

            Hi, Jay.

            This part of the limitation act means that banks and debt collectors cannot take any legal actions against you if they have not make any legal proceedings and the necessary steps to get the repayment within the limit of 6 years. It does not necessary means that the debts are forgiven, it only means that the institutions cannot sue you if they do not do so within 6 years after the loan repayment is due.

            Thanks for the question and we hope this helps.

          • Lee

            hi, if my credit card statement balance is 10k, minimum payment is 300, what if i pay 300 for minimum payment before due date, would my ccris and ctos label bad record? how much interest will i be charged for next month (assume no more swap the credit card)? next credit card statement balance still 10k?

            • Chai


              I did walk in to AKPK to ask them to advise on negotiating the credit card full settlement with AEON but the reply is just telling me that they only provide Debt Management Programme and do not help to negotiate for discount or lower amount on credit card full settlement. Can tell me how to negotiate with collection department if the full amount has shot up to 15k from 10k 2 years ago. Thanks.

              • R

                how long does it take for MBB to unblock the CC after the full sum has been paid off?

                • RinggitPlus

                  Hi, R

                  That part, you need to enquire from Maybank since it's their right to determine when your card is unblocked.

                  Thanks for the question and we hope this helps.

                • XYZ

                  I am a foreigner who lived in Malaysia in 2013. I had an unpaid credit card when I left. Will this prevent me from entering the country? How do I go about paying this off now?

                  • RinggitPlus

                    Hi, XYZ

                    This part depends on the Customs Department and LHDN. As such, you might want to contact them in regards to your enquiry.

                    Thanks for the question and we hope this helps.

                  • Peter

                    Hi, I'm Peter.
                    Now bank wanna issue legal summon to me if i'm keep cannot do the minimum payment of this month. Now I owed credit card with amount RM 7,xxx.
                    What action will be taken by bank?