Missing out on paying credit card loans isn’t new. In the countries such as the U.S., working people tend to have loans in order to pay for various things like cars, houses, etc. You can loan anytime you want as long as you have a job and a stable income. The hard thing though, is the fact that it is inevitable for you to miss out on some payments, due to some problems that can happen along the way.
What will happen if you miss out in paying your loan’s monthly interest? Well, here are the things that could possibly happen:
- After you missed one credit card payment, you will be charged a $25-35 late fee. Since that fee is added to your overall balance, it will also begin to accumulate interest.
- After 30 days, your missed credit card payment (incomplete payments are also considered missed) will be reported in the major credit card bureaus: Equifax, Experian and TransUnion. This can lead to a substantial drop in your overall credit score.
- A low credit score does not only affect your name; it also affects your future loans. Since credit card companies impose interest rates and payments depending on a person’s overall credit score, the message is simple: a lower score means a higher interest rate in your future loans.
- After six months, your credit card company will ‘charge off’ your debt and will sell it to a third-party collections agency. This means that your former credit card company has given up on collecting what you owe and had given your debt to another creditor which, compared to the former one, can be downright messy.
If you think that there’s a chance that you’ll miss out on paying your credit card this month, call your credit card company immediately. State your reasons why you can’t pay in time and kindly ask for an extension. On the other hand, if you have a six-month long outstanding payment, pay a closer attention to your own rights. If in case that your collections agent abuses you in any way, report it immediately.