Paying bills is usually not a pleasant experience. They always seem to be higher than you thought they would be and each time you make a payment your bank account balance goes down. Though paying bills is a necessary evil that many people dread, the feeling after missing a payment can be much worse.
Missing a credit card payment is not always due to the fear of reducing your bank account or seeing the new balance. Sometimes you may have just forgot the due date or simply do not have enough money in the bank to make the minimum payment. Credit card companies can even get sneaky about payment dates, requiring you to make payments online up to seven days before the due date for what they call “processing.”
Late credit card payments are understandable and can happen easily. Sometimes you can call the credit card company and ask them to forgive you, but that can usually be a hassle. Late credit card payments will have consequences.
Consequences of late credit card payments
Late fees – A missed or late credit card payment will accrue a fee of anywhere between $25 to $38. If you fail to make the minimum payment you will also be subject to a late payment fee. If you totally forget to make a payment, you may be shocked to see the new minimum balance which will include the missed balance and the current balance.
Credit score – One of the biggest factors that goes into determining your credit score is payment history. Your payment history accounts for 35 percent of a credit score, which means a late payment will influence your rating for the worse. Late payments will also stay on your credit report for up to seven years which potential lenders can also see. The amount of money you missed paying will not play any role in adjusting your credit score, so it will not matter if it was a missed $20 payment or $250. When it comes to how your credit score factors late payments, it goes by length of delinquency, how much you owe, how many late payments you have and how long ago the late payment is from.
Interest rate increase – Late payments can trigger an increase in interest rate that is applied to the card. Interest rates can get as high as 29.99 percent. This increase will add significantly to your overall balance and could take six months to a year of on-time payments to have it considered by the issuer to be lowered again.
If you are struggling with debt and having a difficult time staying current on your credit card bills, you may want to consider speaking with an attorney about the option of filing for bankruptcy. You may find there are benefits to a bankruptcy filing and it can immediately stop collection calls from credit card companies.