A late credit card payment is not the end of the world, although at times it might feel like it. After all, late payments can have quiet an impact on your credit score, especially if you make it a habit. You might not realize this, but having a late payment can change the terms and conditions of the credit card. It could change things so drastically that having the card might do more harm to you than good. You might just not be able to keep up with the card if the issuer changes the agreement as a result of late payments.
Late payments will result in a late fee, possible interest rate increase, and worst of all bad marks on your credit. Late fees can be expensive, some as high as $39 and they will be added to your account right away. Your interest rate could be increased to 30% if you are more than 60 days late on your payment. Thanks to the Credit Card Act there are limits on what the issuer can do to punish you for your late payment. For example, if you interest rate is increased it will not affect your previous balance. Late payments can also cancel any special introductory rates you might have been given, like a 0% balance transfer offer. Some issuers will report late payment to the credit bureaus right away and some companies are more lenient. You must read your terms and conditions because it will tell you when the issuer considers an account delinquent.
Here’s What To Do
It might feel like the bank is out to get you, but if you act swiftly you might be able to fix the situation without all the negative ramifications. By acting immediately you might be able to save your self some money and keep your credit from getting too dinged up. Here are some steps to follow when you have a late credit card payments.
- Make the payment as soon as you possible can. There is a big difference between a payment that is 3 days late and one that is 30. Don’t think that just because your already late means you can procrastinate. The sooner you make the payment the less effect it is going to have on you. If you act fast then the chances of the late payment affecting your interest rate or credit score is less likely.
- Ask for the late fee to be removed. Every little bit helps and not having to pay the late fee will help you get back on track. You would be surprised how far just asking will get you. Now if you have made it a habit of calling the issuer and asking for credits then there’s probably a fat chance your going to get your late fee waived. However, if your someone who is a good customer and pays your bills on time then they are going to want to help you, but you have to ask!
- Get back to paying your bills on time. This is key to staying out of credit card debt. If you have gotten yourself in a situation where your interest rate has been increased because of late payments, there is still a light at the end of the tunnel. Courtesy of the Credit Card Act, after six months of on time payments you can get your interest rate restored back to the original rate.
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