write off in credit card.
A write off on a credit card happens when the lender decides that the outstanding dues on a card are unlikely to be recovered from the cardholder. This happens if the cardholder has not paid the minimum dues for an extended period, somewhere over 180 days.
At this point, the lender marks the amount as a write off in their books, removing it from their active receivables and reporting it to credit bureaus, such as CIBIL in India.
Please note that this is a serious issue:
- Write off status is a negative mark. It significantly damages the credit score of the card holder.
- There are variations like ‘Total write off’ and ‘Principal written off.’
- Even after a write-off, the borrower legally owes the money, and recovery efforts or legal action may continue.
- Rectifying a written-off status is challenging but possible by clearing the dues and requesting the lender to update the repayment status with credit agencies.