Missed your Credit Card Payment? Here's what you can do!
Let’s just accept the fact that nobody feels good after missing a payment on their credit card. Now, the ideal thing to do in such a situation is doing something about it. The worst thing you can do in any case is not doing anything. Take action quickly and you may be able to reduce the impact of the missed payment.
When left unresolved, a late or missed payment may turn into an expensive blunder, courtesy to the combination of interest charged on the balance amount and late payment charges.
Remember that the majority of card providers charge an interest rate on a daily basis. Therefore, you will have to pay interest for every day you carry a balance. So, it is necessary that you settle your card account as soon as you can and take measures to ensure that you never miss a payment again.
That said, here is a simple guide for you to follow instantly in case you end up missing a payment. With the help of these steps, you will be able to avoid the worst bits of missing a payment and consider this time a lesson for the future.
Settling your Account
In case you are able to, then consider at least paying the minimum due amount on your account. Typically, the issuers will not report late payments to the credit bureau until 30 days from the due date.
If you are able to make your payment before the end of these 30-days, you will not have to stress about the late payment charges being included in your reports. However, there is no guarantee that this will 100% work. The credit card company may report the missed payment before this.
Make a Call to your Card Provider
After you have missed a payment, you may come across two charges- A late payment charge and the interest rate on the outstanding balance. In case the missed payment was an accident, it is recommended that you pay off the balance and call your issuer immediately for explaining that it was an innocent mistake.
After getting connected on the line with one of the representatives from the card provider, you can request them to refund the late payment fee. In case you have paid the balance amount in full, you can also ask them for a refund of the interest amount. However, keep in mind that granting these requests is at the discretion of the bank and it has the authority to refuse your request.
Contact the Provider Again
In case your first call was not successful, try calling them again. The credit card company may refuse to refund the interest or fee charged; however, if you have been efficient with your payments in the past and are a regular user of the card, it is worth trying again.
Try to be polite and do not make demands. This will probably prompt a refund for you. However, dropping hints that you are planning to switch to some other card provider can be a solid last-ditching option.
Setting up Automatic Payments or Notifications
Your card provider may let you set up a text or email notification, which reminds you of the due date of your future bills. You also have the option to set up your checking account for making automatic payments. Select to make payment of your balance amount in full every month, and you can avoid having to deal with charges such as late payment fees or interest.
Please note that this is dependent on your balance. For instance, you may still have to pay interest charges on the balance of your cash advance and your balance transfer irrespective of whether you make payments in full or not. This is because usually there is no grace period for balance transfer and cash advance.
Checking your Credit Reports
Although your credit reports might not get affected if you at least pay the minimum due amount on or before the completion of 30 days, this is not the case always.
Here are some of the exceptions to this case.
- When your payment is late by 180 days or more- In this case, your credit card company can call it a charge-off. This means that the provider will take it down from their books; however, you will still be liable to pay them the amount. At that point, they might mark your account on your credit report as “in collections”. The debt may be sold to some third party, which will attempt to collect the amount from you.
- When do not pay your minimum due amount on time- This payment can be included in your credit report. Generally, this will stay on your reports for a few years.
In case you are late with a payment, your credit card provider may increase the rate of interest charged on future purchases. It is essential to make payment of your debt as soon as you can because if you end up missing two monthly payments consecutively (that is, late for more than 60 days), the provider can put this penalty rate of interest to your existing balance too.
Remember that some credit cards do not have a penalty rate of interest, so go through the terms and conditions of your card properly to check if this is applicable to you or not.
The Final Thought!
In case you have foreseen that late payments are a persistent issue, then rake proper precautions by selecting an appropriate credit card and setting up automatic payments and notifications. However, if you end up missing one payment on your card, try to make a minimum payment at least as soon as you can and contact the provider for requesting a refund of the additional penalty fee charged.
The more you wait the more serious consequences you will have to face. Taking actions immediately may protect your credit score from getting affected negatively.