Reasons why you should not be late with making your credit card payments.
When people face financial hardship they tend to prioritise their money spending. Many people may not feel like skipping a credit card payment is a big deal. But the truth is that missing even a single payment on your credit card can have repercussions that Willie do not make it worthwhile to be late on your credit card payment. Here are a few things that happen when you Miss or are late on a credit card payment.
Being Late On Your Credit Card Payment Results in the Late Fee Being Charged
Whenever you are late on a credit card payment you are charged an extra fee which furthered mounts up the amount you owe to the creditor.
Being Late on Your Credit Card Payment Can Increase the Interest Rate and the APR on Your Credit Card
Having the interest rate increased because he missed one single payment may result in you having to pay a lot your money as additional interest rates if you are in the habit of taking a balance from one month to another. Missing one single payment can really cost you the long run.
Your Credit Score Is Likely to Get Damaged When You Are Late on Your Credit Card Payment
If the payment on a credit card is lead by more than 30 days the creditor usually reports late payment to the credit bureaus. A single late payment can stay on the credit report for a period of seven years. A mint history is the largest factor that influences the credit score calculation. It forms 35% of the total credit score which means that late payments can have a significant impact on your credit score.
While you may feel that you are willing to deal with a single late payment by paying late fee charges, the Increase in the interest rate and impact on your credit score after long-term issues that may really not make Missing the payment worth the while. Number of days that you are late on the payments also makes a difference to the impact on the credit score. It is considered that a payment plan is 30 to 60 days late will not have the same impact on the credit score that a payment that is more than 90 days late. A payment that is played by more days will have a more negative impact on the credit score.
In a nutshell missing one month won’t be so bad for your credit score although they may result in the interest rate being increased on your credit card. Missing more than one payment on one credit card for two months is going to be much worse for your credit report. Missing more than three months on a credit card account will have the same a negative impact as accounts that are charged off or sold to a collection agency.