What is a Credit Card?
A credit card gives the credit card holder access to a revolving line of credit. Buying something with a credit card or using a credit card to get cash is borrowing money against the line of credit. The credit card holder can borrow an amount up to the credit card limit. To keep the line of credit open, the credit card holder must make at least minimum monthly payments against any accrued debt. However, if you only make the minimum monthly payment, your credit card company will likely impose relatively large interest charges on any outstanding balances. Some credit cards also require you to pay other service charges and fees as well, including fees for making minimum monthly payments late.
What Will Happen to Your Credit Card After You Leave the Country?
You likely need a U.S. address to maintain your U.S. credit card; however, some credit card companies may allow you to open an account in the new country connected to your previous U.S. account. You should notify your credit card company of any change in address and check with the company for options. If the credit card has rewards, you should contact the credit card company to understand how best to redeem the rewards you have already earned. You may also want to stop any recurring payments being charged to the credit card if they no longer will apply.
What Will Happen if You Try to Use Your Credit Card Outside the U.S.?
You may be able to use your credit card outside the U.S. For certain types of credit cards, the credit card company may charge a foreign transaction fee to use a credit card outside the U.S. These fees may mount up. You should also be aware of the exchange rate used by the credit card company in processing the transaction. You should check with your credit card company for details.
What is Credit Card Debt?
Credit card debt is the total amount borrowed against the line of credit plus any accrued interest and other fees, including fees for late payments. In some cases, the accrued interest and fees may exceed the line of credit. You can minimize interest and other fees by paying off as much of your balance as possible every month on time.
What Happens to Credit Card Debt After You Leave the Country?
Credit card debt exists regardless of where you live. The obligation to repay the debt does not disappear when a person leaves the country. If you miss a credit card payment, you will likely incur fees and penalties on your debt. Once the debt reaches a certain level without receiving payment, the credit card company may cancel your credit card and sell the debt to a debt collector. Debt collectors have a limited time during which they can sue debtors for nonpayment of credit card bills. Such time limits differ by state and are set by each state’s statute of limitations. The credit card company may also report missed or late payments to credit bureaus, such as Experian and TransUnion, which could have a negative effect on your credit rating in the U.S.
Tip: Even if you do not use the credit card, you should still periodically monitor the activity on your credit card for fraud. You should contact the credit card company immediately if you see any charges on your credit card that you did not make or authorize.
What Should You Do to Pay Your Credit Card Debt?
For Supervised Immigrants
If you have some time before you must leave the United States, you should (1) contact each of your credit card companies, (2) tell each company about your situation, and (3) provide a forwarding address in your home country in a letter sent with a certified return receipt requested. Additionally, to the extent available, you should download the smartphone application associated with the credit card and enroll in electronic delivery and payment options. This reduces the chance that you will miss a credit card payment.
For Detained Immigrants
If you are a Detained Immigrant, you may not have enough time during the transition from one location to another to inform your credit card companies that you are leaving. This increases the risk that you will miss payments, which likely will result in fees and penalties on your debt. If you are subject to immediate removal from the United States, you should enroll in electronic delivery and payment options, and download the smartphone application of your credit card company that you can use to contact the company and make payments. Upon arriving in your home country, you should contact the credit card company and, if necessary, send in any payments that are owed or discuss other payment and debt relief options that the credit card company may offer.
What Happens if You Don’t Pay Your Credit Card Debt?
If you don’t pay your credit card debt, you may incur late fees and accrue additional interest on the card each month, which could significantly increase the amount of your debt. Additionally, the credit card company may penalize you in other ways, including by increasing the interest rate on your credit card. The credit card company may also sell the debt to a debt collector for collection. Failure to pay credit card debt may also hurt your credit rating in the United States. Your credit rating probably won’t affect you in your home country, but it may complicate your finances if you ever return to the United States. For example, a lower credit rating or negative information on a credit report could affect your ability to obtain another credit card, receive a loan, purchase a car, or obtain housing.
Note that if you obtained a secured credit card by putting down money as a deposit for the credit card, you may also lose that money.
What Happens if Your Credit Card Debt is Sold to a Debt Collector?
The debt collector may contact you to arrange payment of the debt. However, U.S. federal laws prevent debt collectors from engaging in certain tactics when attempting to collect debt, such as harassment or contacting you at an unusual time or place. You should be aware of your rights and of acceptable debt collection practices.
See, e.g., consumerfinance.gov/consumer-tools/debt-collection for more information.
International debt collection may be impractical for many debts, but your debt does not go away because you have relocated to another country. The debt collector may also sue you in state court to pay for the debt, which should not be ignored. While a person cannot go to jail solely for failing to pay credit card debt, failure to appear for court or to adhere to a court order could result in jail time.