It’s very easy to miss a payment for a number of reasons. Whether it’s an honest mistake like cancelling the direct debit by accident, or not having the funds in your account on the day of collection, it’s never a good feeling regardless of the cause. Left unresolved, it could be a costly mistake. You might be able to minimise the effects of a missed payment with quick action, so take stock with these five pointers to help you.
First of all, consider paying at least the minimum amount due on the account if you can. Credit card issuers don’t usually report late payments to the credit bureaus until they are 30 days past due. Therefore, if you can make your repayment before the 30 days has lapsed, you might be in the clear and not have to worry about the late payment being marked on your credit file. Although remember, there are no guarantees that your late payment won’t be reported to the bureaus before then.
After missing a payment, you’ll likely see two charges: A late fee; usually between $25 and $35, to include interest on the balance. If the missed payment was an accident, you may want to call your issuer and divulge that it was unintentional and won’t be happening again. Also, that the late payment has already been made once you realised the mistake happened. You can then request them to refund the late fee and the additional interest charged the fee if you’ve paid the balance in full. Although do remember – it’s at the lender’s discretion to grant your request and they can easily say no.
If your first call wasn’t successful and you didn’t get anywhere, consider maybe trying again. The issuer isn’t required to refund the fee or interest charges, but if you don’t ask you don’t get, especially if your payment history is consistent and you’re a regular user of the card. It always helps to be courteous and polite, people generally respond more positively when a gracious approach is adopted. Refrain from making demands, but be clear in your objectives. If you feel you are being harshly treated, maybe mention that you’re considering switching to an alternative credit card provider to see if that resolves the issue.
Even though your credit file may not be affected if you pay the minimum amount due within the 30-day period, this, unfortunately, isn’t always the case. If you don’t make the minimum payment on time, the late payment could be marked and recorded on your credit report and it usually stays there for a period of 5 – 7 years. If your payment is over 180 days late, the lender may declare it as a charge-off – which basically means they take it off their books but you still owe the money. At this stage, the debt might have been recorded in the collections section of your credit report. There is also a chance the debt has been sold onto a debt collections agency to recover the money you owe.
Also to consider, should you be late with a payment, the credit card issuer may increase your interest rate on future purchases. This is why it’s important to pay off your debt as soon as you can because if you miss two concurrent monthly payments (if more than 60- days late), the issuer can apply this penalty interest rate to your current balance owed. The card issuer is enforced by law to review your account once every six months after the interest rate is increased, although there is no guarantee they will lower your interest rate after the review.
Most credit card issuers allow their customers to set up email or text notifications to remind you when your bills are due. Try to avoid late payments, and if you haven’t already set up a direct debit from your current account for the minimum amount due, the statement balance or the total balance.
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