If you’re thinking about skipping a monthly credit card payment, you might want to think again. Here’s what could happen if you don’t make that payment.
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If you’ve ever missed a credit card payment, you know how unpleasant it can be. Your card issuer may assess a late fee, and your interest rate could rise. You might even see a negative mark on your credit report.
But what exactly happens if you miss a monthly credit card payment? In this article, we’ll explore the consequences of a late payment and what you can do to avoid them.
First, let’s review some basics about credit cards and payments.
The Consequences of Missing a Payment
If you miss a monthly credit card payment, you will be charged a late fee. Your credit score will also take a hit, and you may be required to pay higher interest rates on future purchases. In some cases, your credit card issuer may even close your account. Let’s take a closer look at the consequences of missing a monthly credit card payment.
If you are more than 30 days late on a credit card payment, you will likely be charged a late fee. The average late fee is $27, but it can range from $13 to $38. Some credit card issuers will waive the first late fee if you are a first-time offender and your account is in good standing. You may also be able to have the fee waived if you call customer service and explain your situation. Even if you are successful in getting the fee waived, however, your interest rate may increase, and you will still have a blemish on your credit report.
Increased Interest Rates
If you’re carrying a balance on your credit card, missing a payment can cause your interest rate to skyrocket. That’s because most credit card companies have what’s called a “default APR.” This is the interest rate you’ll be charged if you make a late payment or your payment is returned for any reason. The default APR is usually much higher than the card’s regular APR— sometimes as high as 30%.
That means if you’re carrying a balance of $1,000 on your card with a regular APR of 15%, and you trigger the default APR, you’ll suddenly be paying $300 in interest every year instead of $150. And if you keep missing payments, that default APR can stick around for up to two years.
Damage to Your Credit Score
Missing a credit card payment can damage your credit score and make it harder to get approved for loans and lines of credit in the future. It can also lead to higher interest rates and fees, as well as damage your relationships with creditors.
If you’re struggling to make ends meet, talk to your creditors about alternative payment arrangements or consider consolidation or debt relief options. Missing a payment should be a last resort.
What to Do If You Miss a Payment
If you have missed a credit card payment, don’t panic. There are a few things you can do to mitigate the damage. The first thing you should do is call your credit card issuer and explain the situation. They may be able to work with you to set up a payment plan. You should also try to make a payment as soon as possible to reduce the amount of interest you will accrue.
Contact Your Credit Card Company
If you find yourself in a situation where you can’t make a payment, the first thing you should do is contact your credit card company. Many companies have programs in place that can help you make a late payment without damaging your credit score.
Some companies may be willing to work with you to set up a payment plan, or they may allow you to skip a payment without incurring any late fees. It’s important to remember that missing a payment can still result in interest and other charges, so you’ll want to make sure you catch up as soon as possible.
If your credit card company isn’t willing to work with you, there are still a few things you can do to minimize the damage. One option is to transfer your balance to another card with a lower interest rate. This will help reduce the amount of interest you’re paying on your outstanding balance, and it may give you some breathing room to catch up on your payments.
You can also try contacting a nonprofit credit counseling agency. These organizations can help you create a budget and develop a plan to get out of debt. Credit counseling services are typically offered free of charge, and they can be an invaluable resource if you’re having trouble making ends meet.
Create a Plan to Catch Up
It can be tough to make ends meet, and sometimes you may find yourself behind on your monthly credit card payments. If you’ve missed a payment or are struggling to keep up with your bills, don’t panic. There are steps you can take to catch up and get back on track.
The first thing you should do is contact your credit card issuer as soon as possible. Many issuers have programs in place that can help you catch up on late payments. They may be willing to work out a payment plan or waive certain fees.
If you’re having trouble making your minimum payment, you may want to consider transferring your balance to a new credit card with a lower interest rate. This can help you save money on interest and make it easier to pay off your balance.
You may also want to consider consolidating your debt with a personal loan. This can help you get a lower interest rate and simplify your monthly payments. Just be sure to shop around for the best rates and terms before you apply.
Whatever option you choose, it’s important to make sure that you stay current on all of your payments going forward. Missing another payment can damage your credit score and make it even harder to salvage your financial situation.
Consider a Balance Transfer
If you’re only able to make minimum payments, or if you know you won’t be able to make a payment by the due date, contact your credit card issuer immediately. Explain your situation and ask about your options. Some issuers may be willing to work with you to set up a payment plan or waive late fees.
making only the minimum payment each month, it could take years to pay off your debt, and you’ll end up paying much more in interest. If you’re struggling to make ends meet, it might be time to consider a balance transfer to a lower-interest credit card. This can help you save on interest and get out of debt faster. Just be sure to read the fine print before you sign up for a balance transfer — some cards charge hefty fees for this service.
The bottom line is that missing a monthly credit card payment can negatively impact your credit score and your ability to use your credit card. If you’re struggling to make ends meet, consider talking to a financial advisor to help you get back on track.