60-second summary
If you receive a default notice letter on your credit card, here’s what you need to know:
A default notice is a formal letter warning that you’re behind on your credit card payments. You’ll have at least 14 days to act before the account defaults.
The default notice will include details of the amount owed, the payment deadline and potential actions the creditor might take if the debt goes unpaid.
You should pay what you owe if possible or contact the provider for repayment options if you can only afford part payment.
If you can’t pay back what you owe or ignore the default notice letter, your credit card account will default and you could face legal action.
A notice of default only applies to debts covered by the Consumer Credit Act, such as credit cards, loans and hire purchase agreements. Mortgages, utility bills, council tax and tax debts are excluded.
What is a default?
A default happens when you don’t make payments on your credit card or loan and the provider closes your account. In effect, you’ve broken your agreement with the lender. For example, a credit card default can happen if you miss several payments or stop repaying altogether.
What is a default notice?
This is a formal letter from your lender or credit provider warning that you’re behind on your payments.
It will typically be sent to you if you haven’t kept up with your payments for between three and six months. This can vary, though, depending on the credit provider.
By law, you must be given at least 14 days to respond. If you don’t get in touch within this time, then your credit account will default and you could face legal action.
A default notice is a warning that you need to take action to avoid further, more serious consequences. It doesn’t mean that you’ve already defaulted, but you do need to act – quickly – as detailed below.
What information will a default notice letter include?
A default notice will include the following:
The type of credit agreement you have and details of how it was broken. For example, you missed the repayments
What you need to do, how much you need to pay back and how long you have to do this
Details of what the creditor intends to do if you can’t repay the amount stated.
What should I do if I get a default notice on my credit card?
Receiving a default notice can be stressful, but it’s important to take urgent action. You have at least 14 days to reply and whatever you do, don’t ignore it. Here are the steps to take:
Review the notice: check the details are correct. If anything seems wrong, then contact your credit provider. Make sure you understand what’s asked of you, including the amount you owe and the payment deadline
Pay the required amount: if you can afford to pay what you owe, then your credit card account won’t default. There’ll be no other consequences.
If you can’t afford to pay the full amount but can pay some of what you owe, then:
Contact your credit provider: they may offer a repayment plan to help you pay back the debt. This would avoid any further action being taken against you.
If you can’t pay any of the debt or disregard the notice, your credit card account will default. That means the creditor will cancel your credit card agreement and they could:
Pass the debt to a debt collection agency
Take court action against you
Ask a court to take back the vehicle or other goods if your debt was a hire purchase agreement.
Ask for help and advice: nobody should feel that they must tackle debt alone. You can find free, expert debt advice from trusted services such as MoneyHelper, Citizens Advice and National Debtline. Our guide to how to get out of debt lists some steps you can take to start reducing what you owe.
What debts do default notices apply to?
Default notices only apply to debts regulated by the Consumer Credit Act, including:
Credit cards and store cards
Store finance
Personal loans
Debts that aren’t regulated by the Consumer Credit Act include:
Utility bills, such as gas, electricity and water
Debts to local or central Government
Council tax
Debts to family or friends
Debts to unlicensed lenders or loan sharks
Benefit overpayments
Taxes
Some credit union loans
Charge cards
Some business debt.
Can employers see my default?
This could depend on the type of job you’re looking for. Most employers will only check publicly available credit information about you, which would show up any County Court Judgments (CCJs) or bankruptcies.But if you’re applying for a job within the financial sector, then an employer could ask for your permission to run a full check. This means they would then see any defaults on your record.
How do I make a payment if I receive a default notice letter?
If you receive a default notice on your credit card and you can afford to make a payment, you can do so:
Via an app: most banks offer mobile apps that allow you to make payments quickly and easily
Via online banking: log into your online banking account to transfer funds directly to your credit card provider.
Alternatively, you can also make payments via telephone banking or in person at a bank branch.
FAQs
What is the difference between a default and default notice?
A default notice is a letter from a creditor or lender that they must send to you before they register your account as in default. The notice gives you at least 14 days to make a payment to prevent further action being taken.
A default is the actual failure to meet your credit obligations. In other words, when you don’t make the payments on your credit card or loan.
Can I get credit, such as a loan or mortgage, if I have a default?
Having a default on your record can make it more difficult to get credit, but it’s still possible.
Some providers specialise in offering credit cards, loans or mortgages to those with poor credit. However, they are likely to offer you higher interest rates and might place restrictions on how much you can borrow.
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Allie has spent her career helping people quickly understand complicated topics, to help them save money and focus on what matters. With almost 10 years’ experience writing, leading and managing content, she is an expert in personal finance and insurance products.
Ele Clark is an award-winning editor who has held leadership roles at Which? and news-stand publications in London and Dubai. She’s appeared across the press and media, including BBC’s Panorama. With almost 20 years’ experience in personal finance, insurance and consumer journalism, she leads a talented team at Compare the Market, creating insightful, accessible content to help people make informed financial decisions.
Charlie is a senior commercial leader with close to a decade of experience across the UK’s leading personal-finance and comparison platforms. Before joining Compare the Market as Head of Commercial in 2024, he held senior commercial roles at TotallyMoney and MoneySuperMarket Group.
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