Missing Minimum Payments

Sometimes, you may think that if you have more important expenses to be met urgently, you can miss one or two minimum payments on your credit card and it will not hurt you much. But this is not the truth unless you surely make your minimum payment in the next month. Missing minimum payments can really ruin your entire financial health and may influence you in the following ways:

Credit score: Even if you miss a single credit card payment, some credit card companies may report about this to the credit card bureau which will ultimately lead to your credit score being lowered down by many points. This may show in your credit report and you may be turned down in future for any credit you apply for and if some money lender agrees to give you a loan, it will come with a very high rate of interest. You may also not be able to avail a new credit card if the lenders see missed payments on your credit report. Therefore, it is wise to make your minimum payments regularly as your credit score is much more important than anything else.

Default rate of interest: If you miss your credit card payments, the credit card company may change your rate of interest back to the default rate which was quite high as compared to your present one. So, try to make your minimum payments regularly and maintain your promotional interest rate for as long as possible. The default rate of interest may be as much as 10% higher than the promotional rate of interest.

Facilities: There are several facilities that credit card companies provide to their responsible customers. These facilities may include reduced rate of interest, regular gifts and bonuses and special discounts. Even if you miss a single minimum payment, you may be deprived of all these facilities.

Late payment charges: Not only a missed minimum payment will affect your credit report, it will also require you to pay a late payment charge which is just an additional burden.

If you are aware that you are going to miss your minimum payments this month due to any of the reasons including divorce, illness or redundancy, you should contact your credit card company before hand. In this way, it will understand that you are a genuine person and it can become somewhat liberal towards you. Missing minimum payments can cost you much in the long run and thus it is wise to make them regularly as far as possible.