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Home >> Lending >> Credit Cards
Late Payments on My Credit Card
I guess this isn't so much of a question as it is something I learned the hard way and want other people to know. I had a really hectic month recently and I ended up being late making payments on my bills. My interest rates went up on my charge cards because of it. People should know this can happen.
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 You've made a very important point. When you are late in making payments, there are consequences -- and none of them are good. The credit card company understandably becomes concerned that you aren't a good credit risk. Under the terms of the credit card agreement, the card issuer can show its disapproval by increasing your interest rate. In effect, they're saying "Now if you want to borrow more money from us (via charges on your credit card) it's going to cost you more because we think you're a riskier borrower."
If you are late, you're going to have a late fee. Your interest rate may adjust upward for future charges, and you may have jeopardized your ability to get your credit limit increased in the future. How do you make sure this doesn't happen to you?
Establish a system for ensuring your bills get paid on time. If you're paying by mail, allot a minimum of four business days for the mail to get from where you are to where it needs to be -- and that's assuming you drop the envelope in a Postal Service mailbox. Have a spot in your house, apartment or office where you always put your bills when they come in. Make a master list that reflects due dates. It's unlikely you will be able to just write checks once a month, and you may not even be able to just do it every two weeks, depending upon the number of bills you have and what the billing cycles are. Ideally, you should have one day a week when you, without fail, go through the bills you have received, write checks, and get the payments into the mail. Take every precaution to guard against slipping up and sending a bill in after the due date.
Payment's due today? Look at the bill. See if there is some type of wire transfer or quick payment arrangement you can make. Yes, it will cost you money to do so, but you'll save in the long run.
If you have some kind of emergency that results in a payment being made late, contact the company immediately. Point out your past history of making timely payments. Explain the circumstances that prevented you from making your payment on time this time. Ask specifically for them to waive the late fee and to not raise the interest rate. The worst they can do is say no, and they may very well say yes.
Published on BankingQuestions.com 7/28/06
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