What Happens When You Miss or Delay a Credit Card Payment?

By PolicyBazaar
  | Published: 08 July 2020 | Last Updated On: 29 December 2020
Average Rating / 5 (ratings ) | 1076 Views

Get cashback up to AED 2000

Cancel
Cancel
By Clicking on "Proceed", I declare that I am a resident of UAE and holding a valid Visa and agree to the website Privacy Policy and Terms of Use.
It can be pretty easy to miss out on the payments of your credit cards in UAE if you are juggling simultaneously with numerous different bills all having different due dates for the payments, and if you have not set up an auto-payment option. Unfortunately, the sad news is that a missed payment on any of your credit cards in UAE can come with consequences that can be expensive.

The impact caused by a late payment is dependent on how late your payment actually is and the terms and conditions of the card that you own. You may end up incurring a late payment fee along with a penalty rate of interest and the worst of all, a risk of damaging your credit score.

Below is a thread that has reviewed what actually happens when you end up missing a credit card payment the fee that you may be charged, the effect that is caused to your credit score, and how you can prevent late payments.

Late or Missed Credit Card Payment: The Consequences

The consequences that a late or a missed credit card payment is different based on the number of days by which your payment is due. It is not going to be the end of the world if you end up missing the payment on any of your credit cards in UAE just by a day. Usually, the credit card providers do not report the payments that are less than 30 days late from the due date. However, if your payments are late by 30 or more days, the penalties can start to line up for you.

Common results that might arise from late payments generally are:

  1. Late Payment Fee: Typically, in most cases, you would be slammed by the provider with a late payment charge.
  2. Penalty APR: A late payment can lead to your interest charges rising up significantly more than your general expenditures’ APR. However, this penalty APRs can be reverted back to the normal APR in the case of some providers under certain terms such as 2 regular payments.
  3. Cancellation of the Period With 0% APR: If you are benefiting from an interest-free introductory period, then you have a risk of losing out on such an offer if you make a delayed payment.

Late or Missed Credit Card Payment: Impact on Your Credit Score

A missed or delayed payment on your credit cards in UAE can have serious negative impacts on your credit score. The longer is the period of your payment being past due, the more will be the drop in your score.

For someone that has a high credit score, the impact will be larger. This is because someone that has a low credit score has their past behavior already being reflected in the score. The addition of another risk indicator will not be as significant as someone who has a clean report.

Missed Credit Card Payments: Steps to Take

If you have ended up missing a payment on your credit cards in UAE, it is important to take a step for action as soon as possible. Here are some steps you should take to minimize the negative impact of a delayed payment:

Pay At Least the Minimum at the Soonest

The sooner you pay the dues, the better it is for you. If you have a payment that is less than 30 days due, you can actually prevent it from being reflected on your credit score. And if it has been due for more than 30 days, you can still manage any damages caused by paying up at least the minimum due amount.

Call Your Card Provider and Negotiate Your Payment

If this is the first time your payment has been late, there are good enough chances that your card provider might waive off your late charges. You can simply contact the customer service of your insurance provider and ask if this waiver can be provided.

Do Not Miss a Payment

Just missing on one payment might not be the most horrible thing, but if you get into a habit or already have one of paying late, you can have some serious implications coming your way. Make sure to make payments on time always, and the next section details the tips to prevent any delayed card payments.

Late Payments: Preventions

Below are some tips that you can follow to avoid any delayed payments on your credit cards in UAE:

Set up Auto Payment

Card issuers offer cardholders with an easy way in order to prevent any late payments: auto payment facility. You can set up this service in a matter of seconds and take advantage of having peace of mind that the payment on your credit cards in UAE is scheduled. This facility for autopay can be set up for the minimum monthly payment, the total statement balance, or any other amount. It is recommended to set it for your entire payment in order to avoid any interest payments, but if that does not seem possible you should at least choose the minimum amount due.

Set Reminders for Payment

If you do not wish to take advantage of the auto payment facility, you can opt for setting reminders or alerts on your calendar or email. There are many of the card providers in the market that let you opt for such reminders for when your card statement is available, when your payment is posted, when your payment is due by just some days, among many other options. These options can vary from one provider to another, so you need to check with what your issuer is providing you.

Change the Due Date for Your Payment

If you have quite some bills that you need to pay, it is possible for your due dates to be spread out across the entire month. This might just end up increasing the probability of you having a missed payment, so it can be a good alternative to have your payment due dates tailored and adjusted. It can be advantageous to have the dates on the same day or right after your salary credits.

So, make sure you are aware of your due dates and make your outstanding payments on time to avoid any impact on your credit score or the unnecessary fee and charges.