ORLANDO, Fla. (Ivanhoe Newswire) — Nearly 34-million Americans admit that they’ve been late making credit card payments, and about 18-million say they’ve missed payments entirely. But what exactly happens when you miss a payment?
It’s that never-ending bill that comes every month, whether you like it or not, and just one missed month can be a late fee. It’s capped at 27 dollars for your first offense. Your credit card company can also legally raise your rate up to 29.99 percent.
If your payment is two to three months late, your account will be reported to the credit bureaus, and it could remain on your credit report for up to seven years, as well as prevent any new purchases.
If your payment is four months or more overdue, your account can be sent to a collection agency, or your card issuer may decide to take legal action against you. You’ll also receive a letter from the IRS notifying you that you need to pay taxes on your debt.
To avoid the financial mess, call your credit card company’s hardship department to work out a payment plan. You can also contact debt negotiation companies to work on your behalf. But the best plan is to stay on top of those payments.
Just one late payment can drop your fico credit score by 20 points or more! This can hurt your ability to rent an apartment, buy a house, or lease or buy a car. Also, more and more employers are starting to look at the credit reports of job candidates, so it could affect your ability to get a job, too.
Contributors to this news report include: Julie Marks, producer; and Jesse Draus, editor and videographer.