You may occasionally think about putting off your credit card payment for a few days of even a few weeks, especially when you're low on cash. Sometimes even knowing the consequences can convince you to send your credit card payment on time. Think about the benefits of timely credit card payments.
More credit card companies are turning to debt collection agencies when their customers don’t send credit card payments on time. Even the smallest credit card balance can get sent to a collection agency if it goes unpaid for several months.
Credit card issuers are allowed to increase your interest rate if you’re more than 60 days late on your credit card payment. The default interest rate on many credit cards is a staggering 30%. Keep paying your credit card on time to avoid paying a higher interest rate on your credit cards.
3. Avoid late fees.
Credit card companies charge a late fee when your credit card payment is late. Thanks to technology, you might be charged a late fee just moments after your credit card payment is due. Avoid these expensive late fees (between $15 and $39) by sending your credit card payment on time.
Thirty-five percent (35%) of your credit score is based on how whether your credit card payments are made on time. You’ll get the most credit score points if you consistently make your credit card payments (and all your other payments) on time.
Insurance companies increasingly use your credit score to determine your insurance rate. When late credit card payments lower your credit score, your insurance rates could subsequently increase. Sending your credit card payment on time helps you get the best insurance rate.
6. Keep your monthly payments low.
When you make a late credit card payment, your next minimum payment will be more than double what it would have been had you not missed a payment. That's because your next credit card payment will include two minimum payments and a late fee. If you have trouble making your credit card payment putting it off won’t make it easier to pay. Instead, the opposite happens.
You risk having your credit cards cancelled when you miss your credit card payment. If that happens, it could hurt your credit score, especially if you have a credit card balance. Keep sending your credit card payment on time so your account remains open and in good standing.