The Dangers of Late Payments for Credit Cards and How Short Term Lenders May Help You Avoid Them

If you use credit cards (who doesn't?), then perhaps the first rule you need to learn is to always make at least the minimum payments on time. If you need to have that rule plastered all over your house so you don't forget, do it! It's because a lot of bad things happen when you don't pay the minimum amount of money on time. If it weren't for short term lenders who can provide the necessary cash you need, there's very little you can do to avert the coming disaster (short of begging your friends for the money, that is).

You Have To Pay Late Fees

Even if the credit card bill is just for $20, if you pay a few days late then you have to pay a fine on top of the credit card payment. This penalty can go up to an extra $25. This penalty is incurred for each month that you don't pay your credit card bills and adds to the principal debt that increases with interest.

This is just the first penalty you have to pay, and it's far from the worst.

Your Credit Card Interest Rate May Go Up

If you ever read the fine print on your credit card agreement, then it may surprise you to discover that many cards companies retain the right to increase the interest rate should you miss a deadline for payment. This is especially common if the cards came with low introductory interest rates. Even if you were paying 0% interest for the first year, when you make a single payment you may find yourself locked with a credit card that charges up to 30% interest.

Your Credit Rating Suffers

Credit card companies make a practice or reporting late payments to the three major credit reporting agencies. This kind of a black mark stays on your credit record for seven years.

Since your payment history is most probably the important factor when your credit score is determined, when your late payment is reported your credit scores invariably nosedives. FICO conducted a study on this, and showed that even one late payment is sufficient enough to lower a credit score of 780 or greater by about 100 points.

With a lower credit score, you inevitably have to pay higher interest rates whenever you need to borrow money from institutions. Some banks may even refuse to lend you money if your score is low enough.

All in all, late payments can leave you in a total financial mess. It doesn't matter if you just forgot about your credit card bills, or that you were in dire short-term financial straits at the time. Late payments not only cost you a lot in fines and in higher interest rates, but it can affect your financial situation for many years to come.

Avoid getting into this mess by availing of short term loans which you can easily get online, and you're as good as gold. You only need a bank account and a job that pays you enough to cover the amount you're buying. It's really that easy to get the cash you need within 24 hours to enable you to pay your credit card bills on time.

We help consumers navigate the world of credit and finance. You can learn more online by visiting www.personalloanlenders.net or www.bestofferscreditcards.com to learn more about short term loans, credit cards and finance offers.

This article was published on 08 Apr 2013 and has been viewed 446 times
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