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credit card payments |
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Know The Consequences Of Missing Out On Making Timely Credit Card Payments
If you have been buying goods and services on credit, you would have come to realize the need to make payments to the issuer at specific times. In case you have failed to make such payments on time, though it may not bother you too much, but it will send shock waves in the minds of creditors who won’t feel quite so complacent about not being paid off in time. Of course, this may not result in your issuer calling you at various times of the day and even at night trying to get you to make your payments, but it could still inconvenience you greatly.
Late Fees
In fact, if you find that you have been missing out on making payments, you will then need to consider a few things that will happen to you whenever you miss a due date. The first consequence of missing payments is that you become liable to paying the creditor a late fee which could range from between fifteen to thirty-five dollars and this fee must be paid for each month that your payment is late.
Another consequence of missing your payments is that you will become liable to paying a higher interest rate. So besides having to pay late fees, you will also find that the issuer will raise your interest rate to more than it was when you were being charged at the default rate. This in turn means that you will also end up paying higher finance charges and thus keeping a balance with the issuer will become costlier for you.
In case you do miss out on making payments on one card, it could have a snowballing effect and result in having to pay higher interest rates for your other credit cards as well, especially when the issuer has included a universal default clause in the card agreement that you signed with them.
Furthermore, missing out on making payments will even lead to the matter being reported to credit bureaus, though only if more than thirty days have expired since you were supposed to have made your payments. This means that such reports will be reflected on your credit report and such noting also won’t be removed until seven years have lapsed.
Finally, missing out on making payments will obviously result in your credit score dropping and since payment histories account for thirty-five percent of your credit scores, missing out on making payments will result in considerably downgrading your credit score and thus lead to more difficulties in getting fresh credit at a later time.
So it should be abundantly clear that using a means having to understand that you must in fact use a in a responsible manner, or not use it at all, because otherwise you might risk many financial liabilities as a consequence of indiscriminate use.
By Bob Taylor
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