While it is considered fashionable to be fifteen minutes late in some circles, your creditor enclave is not one of them. Late credit card payments are not only faux pas, they are costly to you! In recent months credit cards have increased their interest rates and decreased their grace period. If credit cards go un-managed, with bills not paid on time, the amount owed will swell and continue to swell until it is paid off in full. Fifteen minutes late can lead to penalties of hundreds of dollars. Stop the debilitating cycle of debt before it begins by reading more about the importance of on time payments.
It cannot be emphasized enough how important it is to pay your credit card bill on time. This will ensure you avoid getting hit with extra charges that all credit card companies like to levy the second your payment is deemed late.
Paying your credit card bills on time will keep your credit report in good standing as well. Credit card companies send a report containing the details of your payment history to the credit bureaus. The three credit reporting bureaus (TransUnion, Equifax and Experian) report your credit history information to other creditors (auto loans, home loans etc.) who use it to determine your level of risk. If you pay your bills late or miss a payment your lenders may see you as more of a risk, making it more difficult to qualify for financing down the road.
Check out the following scenario: If you owe 1000 dollars on a credit card and don't make a payment on time, you will get charged a late fee of anywhere from 20 to 35 dollars depending on your creditor. So if your minimum payment is only 15 dollars, now you have to pay upwards of 45 dollars with only a minuscule amount being applied to the actual balance.
If you happen to go over your credit limit, you will end up paying an additional penalty, usually 25 dollars or more plus the financing charge as well. So when all is said and done, you are paying about 50 dollars or more in fees plus the 15 dollar minimum payment. Prolong these habits and you prevent yourself from paying down your balance while the creditor continues to reap in the extra money.
Late and missed credit card payments can often lead to not making a payment at all. If this occurs, it is quite possible that the credit card company will close your account and send you to collections for the total amount. The amount owed will continue to accrue interest and late payment fees until it is paid off in full.
In the event you do not respond to collections at all there is a chance your creditor will take you to court to get the money back and many go so far as to garnish your paycheck for the amount until it is paid off. If you run into this, you can be assured that your credit report will reflect as such and the next time you go to apply for another credit card or try to get a loan for something else, you will not be able to.
In order to avoid extra costs and bad credit ratings, it is very important that you pay all your credit card bills on time. If you are having difficulty with this, it is important to contact your credit card company and see if there are ways to offset penalty fees and other charges. Sometimes just opening up the lines of communication can help get you back on track of good payment history.
If you are still in need of financial help, there are options like cash advance online or payday loans that can put cash in hand today to help pay bills and avoid late fees. However, these options have risks of their own and should be looked into thoroughly before using. Each case is different and a person should weigh all of their options before making a financial decision. The best way to avoid the situations described in this article is to try to and avoid using credit cards altogether unless you can pay them off on a monthly basis.
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