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Consequences of making late credit card payments


No one enjoys making late credit card payments, yet it happens at times, mostly enforced by our circumstances, poor financial position and poor memory. Whatever the cause, when you realize that you have to make a late credit card payment, you should be prepared to handle it.

Late credit card payments can damage your credit score besides negatively affecting your overall credit worth. No matter if your payment is 2 days late or 20 days late, the repercussions for making a late payment can have long-term effects.

Here are the consequences you must be prepared to face and handle whenever you are late on credit card payments:

Late credit card payments are red flags for financial institutions

Remember, financial institutions like banks see your payment history and credit score when evaluating your application for credit. On time credit card payments suggest that you are a responsible borrower whereas late credit card payments are often interpreted as an unreliable borrower who can bring financial loss to the credit company.

Late fees for late credit card payments

If you pay your credit card bill a day after the due date, you will be charged a late fee somewhere between $25 and $35. This will show up on your subsequent billing round. Additional late fees would accumulate as you continue making late payments. So it is better to avoid making late credit card payments than paying late fees.

Higher interest rate

Your credit card issuer may increase your interest rate by up to 15 percent if you make one late payment. If you continue making late credit card payments, your interest rate may be reach as high as 29.99 percent, which is a penalty or default APR.

It may show up on your credit report

Usually, credit card companies would not notify the credit bureaus if you were less than 30 days late on making your payment. If you fail to make your credit card payment even after 30 days, the card issuer will notify the credit bureaus, which means that it would appear on your credit report. And remember, once a late payment gets on your credit report, it is going to stay there for seven years. It will also create hurdles whenever you approach a bank for loan.

What to do if you have made a late credit card payment?

  • If you are past the due date, pay it off as soon as possible. The sooner the payment, the better.
  • If your late payment is recent, you can request your credit card company to withdraw the late fees. This would work if you have made late payment for the first time.
  • If late credit card payments have increased your interest rate, its time to get back on track and make regular, on time payments. If you make on time payments for six months, your interest rate would be reversed to what it was before the late payments.
  • If you credit score has been affected by late credit card payments, make sure to pay all your bills on time. Your credit score would go up gradually after some months.

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