Is it okay to miss a credit card payment?

Have you ever missed a credit card payment? It doesn’t matter if you simply forgot to pay it or just didn’t have the money it effects your credit. We have all, okay most of us, made mistakes with our credit especially fresh out of high school. It is unfortunate that credit 101 is not a mandatory class in school considering how much our credit report can effect our lives and our finances. I remember my first credit card and the feeling of importance and freedom it gave especially when I was out shopping. I was young and didn’t understand interest rates or how much it would really cost me putting lunch or expensive coffee on the credit card and taking months to pay it off. What I really didn’t understand was the affect it would have on my monthly budget once I had maxed out the first card and decided it would be a good idea to obtain a new card, then another, then another. I just thought if credit card companies were sending me these credit cards then I must be worthy of using debt with ball and chain

It didn’t take long to figure out how quickly minimum payments would hurt my monthly budget. I had quickly added a hefty amount to my monthly bills and felt overwhelmed at how long it would take me to climb out of the hole. I must say I looked amazing with my new wardrobe but became so bogged down with credit card bills making it hard to pay other bills. There came a time that every time I heard a loud truck I would have to run to the window to make sure my car wasn’t being towed. I was bombarded with the dreaded constant calls from creditors. All of the sudden having credit cards wasn’t so glamorous and was no fun at all.  It took a long while to recover from my credit card downward spiral and was one of the many lessons I drilled into my own children as they began receiving credit card offers.

I am sure many people have felt the same way wondering how did they allow this ugly ball of debt to grow so massive, after all it was just a charge here and there right? Well it adds up fast and takes a long time to pay off when you can only afford to make minimum payments. I wondered if credit was even worth it…until I blew the engine on my car and needed a new one. It was then I realized the importance of maintaining good credit.

What happens when you don’t pay your credit cards on time?

  1. You may be charged a late fee on top of your normal monthly minimum payment usually around $35 dollars.
  2. Your interest rate may drastically increase depending on the credit card company if you miss two payments.
  3. The credit card company may report your late payment to any or all three credit bureaus which could cause your credit score to drop. The good news is credit cards will not report you’re late until after 30 days however you will still owe the late payment if you miss your due date. Late payments reported to credit bureaus can stay on your credit report at least seven years.
  4. If you miss enough payments the credit card company could close your account and turn you over to collections.

So basically it isn’t the end of the world if you miss a payment but if you make a habit of missing payments it will affect your credit scores in a negative way and will make it harder for you to obtain credit in the future. If you are able to obtain credit you will have a higher interest rate which will cost you more of your hard-earned money to repay the loan or balance.

Best practice is to set payments up on auto debt when possible and to keep your credit card balances below 30% of your credit limit. This way you will not miss a payment and your payment history and usage of your card will have a positive impact on your credit and won’t be so overwhelming to pay down the balances.

Good credit is very beneficial when you need it whether it be for a car loan, emergency purchase because your refrigerator stopped working on the day before Thanksgiving or because you feel it’s time to make your dream of home ownership reality.  Team Jefferson Home Loans - The Colony - TX - 75056 - 866-403-1426 - Home Loans - Mortgage - Buying a home - VA home loan - FHA home loan - Refinance - CreditHaving good credit not only feels good and prevents collector calls it can save you money by giving you the opportunity for better interest rates as well so make paying your credit cards on time a priority. You will be much happier you maintained good credit card practices the next time you need to utilize your credit.

That’s all for now, be wise with your money!

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By Donna Jefferson

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