Accidentally Missed Credit Card Payment? Here’s What happens Next
Below is a list of things that will most likely happen when Accidentally missing a Credit Card payment!
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When money is short and something has to give, you might be tempted to delay a credit card payment to free up cash for something more important.What usually happens is that many people actually completely forget there’s a payment and will accidentally miss a Credit Card Payment as a result of delaying it.
While it’s true that doing this will not have as bad results as – say – missing a mortgage payment or failing to pay an electricity bill, it’s not something to take lightly.
Here are the five possible results to be aware of if you accidentally missed a Credit Card payment.
What Happens if I Accidentally Missed Credit Card Payment:
Late Fee Charges
The most immediate and concrete impact of making a late payment is that you’ll be charged a late fee for doing so.
While this charge must only be large enough to pay your card company’s administration fees in theory, the legally capped amount of $25 for a first offense can represent a substantial cost – and if you make a habit out of paying late, this fee can rise up to 3% of your entire balance, each and every month until the situation is resolved.
Credit Rating Damage
Every late payment you make is recorded as a negative on your credit file.
While just one or two of these negatives will have little effect on an otherwise good score, if your credit rating is already in the balance then they can be enough to tip it over the edge.
This will make any further credit more difficult to get, more expensive, or both.
Interest Rate Rise
Credit card companies offer variable interest rates on their cards, meaning that they can change the rate as they choose.
In general terms, the better your credit rating, the less interest you’ll be charged.
If you prove to be a less responsible customer by making late payments, you could find your card’s APR starts to rise, meaning your debt will cost you more, making any financial worries you have even worse.
Credit Limit Cut
If you continue to make payments past their due date, your card issuer may become concerned that you’re experiencing financial difficulties, and will seek to limit their own risk.
This can easily mean that your card’s spending limit is reduced to prevent you running up too much debt.
This is inconvenient if it reduces your ability to use your card, but having your account limit lowered can also have a damaging effect on your credit rating.
This can then lead to the limits on other credit accounts you hold being lowered as well as lenders scramble to protect themselves.
Account Suspension or Closure
Finally, if your late payments are seen to be becoming a repeated problem, your card issuer may decide to cut their losses by freezing your account, preventing any further spending.
This could be temporary, lasting until you’ve cleared your arrears, or it could be permanent, meaning that you’ll need to keep making your re payments until your balance is cleared, at which point your account will be closed completely.
In times of money worries, your credit card payments may seem to be one of the least important to keep up with. As these consequences show, the dangers may be greathearted you think.
