When You Miss The Credit Card Deadline
Category: Credit Card
Every month, a large number of people miss the deadline for making credit card payments. Late payments are one piece of information that credit reporting agencies use when calculating your score. However, late payments of credit cards not only attract penalties but also bring other disadvantages like high rate of interest and affect your credit score. The best thing you can do is make your payments on time each month â that way you wonât be reported as delinquent. Here, the consequences of missing the credit card payment deadline are enlisted below:Credit score may decline
Late payments can have a significant effect on your score affecting your ability to get new credit in the future. How much your credit score declines after a late payment depends on the other information in your credit score â generally, the better your credit, the more points you stand to lose.
Creditors donât just penalize you with a late fee; theyâll often increase your interest rate to the penalty rate, the highest interest rate on your credit card. The higher interest rate increases your finance charges making it more expensive to carry a balance. Late payment fees
Your next billing statement will include a fee for the missed payments. Late fees range typically depends on whether itâs your first time being late in the past six months. Youâll be charged a late fee each month your payment is late.Effect on your credit report
When your payment is more than 30 days late. Entries are added to your credit report and remain stay for seven years. If you miss the next payment, the entry is updated to 60 days, and so on until your account is charged-off after 180 days.Conclusion
Keep a track of when payments are due every month to avoid the bad consequences. Remember to use your money in the most efficient way possible by not making payments below the minimum and understanding the difference between this amount and the total amount due. So be patient, use credit card wisely and handle credit without getting into trouble.