Budgeting your money is extremely important. You need to know what bills must be paid every month, when your bills are due, and where the money to pay the bills is coming from. Those that prefer to pay bills without the constraints of a budget run the risk of forgetting to pay a bill, paying a bill late, or running out of money before the bill is paid. Perhaps some of you might consider a late paid bill to be the creditor’s problems. But in reality, if you are late paying your bills you will be the one paying the price. Literally.
Credit cards companies are not flexible creditors. The terms of the credit card company that you agreed to when accepting the card include fees for late payments. Most late payment fees are $29 or more. The fee is added to the credit card balance and is subject to the same interest charge as your purchases. If you are close to the maximum limit on the card and the late payment fee pushes you over the limit, you will also be assessed an over the limit fee also. The over the limit fee then becomes part of the balance that interest is assessed on also.
Fees are not the only repercussions of paying your credit cards late. Most credit cards include a clause in their terms that allows the company to increase your interest rate if you make late payments. If you are under an introductory rate, it could take only one late payment to trigger the interest rate increase. Late payments are reported to the credit reporting agencies. The late payments will lower your credit score which allows other credit card companies to increase your interest rates also. Even the interest rates on any loans you may have could be increased.
The moral of this story is unmistakable. Make your credit card payments timely. Late payments to your credit card company results in serious financial repercussions. If you are having trouble making payments, imagine the difficulty you will have paying off the cards when the interest rates sky rocket. Let’s not forget the increased interest rates and additional assessments (fees) could result in an increase in the minimum payment due. If you cannot afford to pay your credit cards, then you cannot afford to pay your credit cards late. Always make your payments on time.