Have you missed your credit card payments? If yes, then, you are not alone in the same boat.
According to NCFF's 2016 Financial Literacy Survey, roughly 1 in 4 US adults do not always pay their pay bills on time. Just over half of adults ages between 18 and 34 pay their own bills on time and don't have accounts in collection.
Here are some of the consequences of missing your credit card payment:
- Late payment fees are applied;
- Higher interest rates from penalty APRs are applied;
- Impact to credit report and credit score (if payments are late over 90 days), and;
- and more.
Also, here are some of the calculators and formulas I use to figure out my minimum payments:
- Credit card minimum payment calculator
- Credit card minimum payment formula
- Credit card monthly interest calculator
So, when you miss a payment or two, what do you do, then?
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What To Do When You Miss Your Credit Card Payment
Let's face the fact: Missing a credit card payment is not the best feeling in the world.
Your mind will probably be thinking about the worse things that could happen (e.g. late payment fees charged).
Instead of thinking of the “what ifs”, it's always best to tackle the situation head on and make the necessary actions right away. A one-day delay in action can mean a lot of headaches for you in the long run.
Here are some of the things you should consider doing when you miss a credit card payment:
1. Pay it right away.
When you notice miss you your credit card payment, pay it right away.
If you aren't going to pay the full amount, pay at least the minimum amount due on the account.
Typically, credit card issuers don't report late payments until it's 30 days past due. So, if you make your payment within 30 days after it's due, you may not necessarily have to worry about the late payment being reported in you credit report.
Of course, it's always best to talk to the credit card representative to see what the credit card's policy is on credit reporting.
Note: Always check your credit to make sure your credit report is updated and no additional “late payments” dings are added to your account. You can use Credit Sesame to monitor your credit report and to get your scores monthly for FREE. Plus, you'll get identity protection.
2. Call the issuer and ask for leniency.
When you pay late, there's one guarantee that's going to happen, that is, you will get charged late fee and interest.
Even when you only owe a couple of cents, you will get charged late fee, which is around $35 and interest.
If the missed payment is done by accident, call your issuer right away and ask for waiver. If this is your first time to miss such payment and you've had that card for a long time, your request will likely be granted.
Some credit card issuers will waive late fee and interest charge waiver once per calendar year.
They won't tell you it's possible and that's why you need to ask for it.
If you've had a history of late payments in the past, you should still try to request for waiver. The only thing the issuer can say is “No”. In other words, it doesn't hurt to ask a waiver.
Or in some cases, you can try to seek assistance from credit repair agencies like CreditRepairCompanies.com to help you with communicating with your creditors.
Try this for FREE: Qapital – A new way to save money just by doing the things you do.
3. Automate your payments.
There may be a ton of reasons why you forget or will forget to make your credit card payments on time.
The best thing you can do is automate your payments.
Thanks to modern technology, you can now set up automatic credit card payment with such ease. My wife and I set up recurring payments to our cards so we don't forget to pay them on time.
You can set up your payments online or you can call your credit card issuers to set them up for you.
Some issuers offer payment setup for FREE when done online and by phone. Some will charge when you do it with the help of their representatives. Check with your issuers to make sure if the service is FREE or not.
4. Remember when your bills are actually due.
Even when your credit card payment or payments are all scheduled, it is your responsibility to make sure you remember when your bills are due.
Why do you need to remember the due dates when everything is scheduled? If you don't have enough money to cover the monthly payments, you will need to find ways to put money in your bank accounts.
If you don't have enough in there and the card issuers charged your bank accounts, your payments will bounce or you'll get overdraft charges, which is charged by your bank.
The main reason to automate your bills is to avoid unnecessary charges. If you're bank account gets charged with other fees, you defeat the purpose of escaping from those unnecessary fees.
You can set up a reminder using your cell phone's calendar, Microsoft Outlook, among others.
My wife and I use our budgeting kit, which not only includes income and expense tracker but also bill tracker list, debt payment plan, and so many things.
Note: If you are curious how credit card issuers calculate minimum payment, use this credit card minimum payment formula.
5. Monitor your credit reports (constantly).
Sometimes, even when you've done all the things notated above, there's always a chance late payments could still land in your credit report, which will affect your credit history and scores.
You need to always monitor your credit reports for any negative additions to your credit history (i.e. late payments).
When you do find that such late payments are notated there, there may not be a lot of things you can do at that point. Late payments can be recorded in your credit for seven years.
If payment is 180 days late or over, your issuer may or will declare it as a charge-off. What this means is that the credit card company will write it off or take it off from its book.
Having said that, you still owe the full debt charges and such debt may be marked as ‘in collections' on your credit report and more than likely be passed to third party for collections.
This is why it's always best to monitor your credit to make sure you take actions before those negative reports are put on your credit history.
There are things you can do when you miss your credit card payment. Don't panic but take immediate actions to address issues that may or will result from missing a payment. It's always best to be more proactive.