What happens if I don’t repay my balance - Karat Help Center

Deferred payment fees

If your statement balance remains unpaid one month after the due date, a 2% monthly Deferred Payment Fee will be assessed on the unpaid principal balance.

• Fees do not compound
• Fees continue to accrue monthly until the overdue principal is repaid
• Partial payments do not prevent fees if the full statement balance is not paid

Card restrictions

If your payment fails or your balance remains unpaid:

• Your account may be declined for new purchases
• Your credit line may be reduced or suspended
• Certain account features may be limited

Restrictions may occur immediately following a missed payment.

Account suspension or closure

If the balance remains unpaid for an extended period:

• Your Karat Card will be suspended or closed
• Your credit line will no longer be available
• You will remain responsible for repaying the full outstanding balance
• Deferred Payment Fees will continue to accrue on unpaid principal

Credit reporting

Missed payments will be reported to credit bureaus. Late payments and charge-offs can negatively affect your credit profile and may remain on your credit report in accordance with applicable laws.

Collections

If a balance remains unpaid, Karat will take steps to recover the amount owed. This may include working with you directly or engaging third-party service providers, as permitted by law.

How to avoid these consequences

To keep your account in good standing:

• Pay your full statement balance by the due date
• Ensure your autopay account has sufficient funds
• Contact us before your due date if you anticipate difficulty

If you’re unable to make a payment, reach out as soon as possible.