Oops! What should I do if I’ve made a late credit card payment?
Mistakes happen, we all get behind every once in a while or miss something. When you make a late payment on your credit card a few things happen, none of them are much fun.
Your phone may ring and someone on the other line may clue you in to the fact that your payment is past due and ask you when a payment can be expected. While you may find these calls a bit embarrassing and bring back childhood memories of your mom putting you on the spot while asking you if you stole a cookie from the cookie jar, they actually can save your credit bacon if they help you stay out of the 30 day past due danger zone.
Here are a few more things you can expect when you’ve made a late payment:
1. As long as you aren’t more than 30 days past due, (which usually means you’ve missed two payments in a row) then your credit score won’t get dinged. However, you will get hit with a hefty late payment charge, usually $35 or more.
2. Now for the really bad news, especially for those who carry a balance: Credit cards are unforgiving creatures, and at the first late payment you’ll find yourself in the interest rate penalty box for the rest of your credit card relationship. No warnings or slaps on the wrist, late payments bring heavy handed consequences with your interest rate jumping upwards, sometimes even doubling up to as high as 39.99%.
3. The most classic of penalties is that you may also notice that your card stops working and that your credit card company has decided to ‘freeze’ your card so that it no longer has the ability to make purchases.
What to do about your late payment:
You may be asking yourself what to do now that you’ve found yourself in late payment pickle. The best thing you can do is pick up the phone and ask your credit card company for forgiveness.
Depending on how well you’ve managed your account, and how long you’ve been a customer, you may be able to convince them to put you back at the normal interest rate and perhaps even refund your late payment fee if you’ve been a consistent on-time customer.
“As soon as I saw the late fees and higher interest rate on my statement, I immediately called the customer service number on the back of my Venture Rewards card” says Sherry Moses, a long-time Capital One customer. “When I explained that I had been a customer for more then three years and this was my first late payment, they graciously agreed to waive the late fee and reset my interest rate to the normal rate.”
If you do end up stuck with a painfully high penalty interest rate, and your requests for absolution fall on the deaf ears of your card issuer, you may want to consider applying for a new balance transfer credit card with a low ongoing interest rate to give yourself a break from voracious penalty interest charges.
Good Credit Sense:
If you have taken advantage of a 0% APR into period on a new credit card, you’ll want to be especially vigilant about making your credit card payments on time. Even if you’re scheduled to enjoy two full years of interest free bliss on your new card account, a late payment can strip your 0% interest rate away from you and leave you paying hundreds of dollars of interest. Credit cards can bring convenience, great rewards and other services, but require discipline and control. At CreditSense we strongly recommend the use of an automatic payment system that your card issuer can set up for you.