Introduction

When facing financial difficulties, many people may have to delay their credit card or online loan payments. However, if you are trapped in this situation, you may wonder which one to pay first to avoid negative consequences. In this article, we will explore whether it is better to prioritize overdue credit card debt or online loan payments.

The consequences of delaying payments

First, let's understand the consequences of delaying payments on credit cards and online loans. When you delay your credit card payment, the bank or issuer charges you high interest on the outstanding balance, and your credit score may decrease, leading to difficulty obtaining loans or obtaining financing at a higher interest rate. On the other hand, when you delay your online loan payment, the lending platform may charge you additional fees and interest, and may also damage your credit score, and also sue you for non-payment, which may lead to legal consequences such as wage garnishment, judgments or liens, which can negatively affect your credit score.

Which one to pay first?

If you have both a credit card and an online loan, which one should be the priority? Generally, it is recommended to prioritize credit card payments over online loans. This is because the consequences of delinquent credit card debt are usually more severe than online loans. For example, if you do not pay your credit card balances on time, credit card issuers may sue you, garnish your wages, or restrict your credit card privileges, severely affecting your credit score. On the other hand, if you are overdue in paying an online loan, the lender may only sue for payment, and the level of threat is relatively low compared to credit cards.

Alternative solution

However, there are situations where priority may be given to online loans over credit card debt. For example, if the online loan has a higher interest rate, it may make more sense to pay it off first. Similarly, if you have already negotiated a repayment plan with the credit card issuer, you can pay the online loan first.

Conclusion

In summary, it is recommended to prioritize credit card debt over online loans when delinquent payments are involved. This is because credit card debt has more severe consequences than delinquent online loans. However, this may not apply in all situations, and it is important to understand the details of your specific situation before making a decision.

Legal consequences of delinquent payments

If you fail to pay your credit card or online loan, the lender may take legal action against you. According to Chinese law, if your credit card debt is overdue for more than six months, the bank has the right to sue you in court. If the court decides against you, the bank may be entitled to impose various measures on you, including freezing your bank account or garnishing your wages. Similarly, if you have overdue online loans, the lending platform may sue you, and if the court decides against you, you may face legal consequences such as wage garnishment or asset seizure. Therefore, it is important to prioritize paying off your debts to avoid these severe consequences.