Credit cards have become a dominant part of our lives. With the advanced payment features, we have almost forgotten about the conventional payment modes. While keeping a credit card makes things easier for us. Yet, there are certain downsides of having credit cards. One of them is regular payment of the credit. It is a great deal for many of us. As, routines are hectic. We almost forget to pay for the credit cards after a long day at work. Though, being ignorant of the long term consequences of it. We still think it is alright. But the bad news is there. No! It is not fine to ignore your periodic payments. But the Big Boss, straight out of Orwell's 1984 is watching this carelessness of yours. By Big Boss, I mean your credit card issuer, which carefully keeps a note of this ignorance of yours. Setting you up for a credit default, it works in silence. We all think it will get fine with the passage of time and the credit report at the end will be positive. But do you think it is going to make your credit report a positive one? The answer to this will be a no. But this is not the only shocking revelation, you are going to get. There are some other long-term deep impacts attached with your default credit. One missed payment can have a little impact at the beginning. But, if you are not taking into account this little fault. These are ultimately going to turn into grave impacts.
Missing a single monthly payment might be minute for you. But it is an unacceptable mistake according to your credit card issuers. You are supposed to pay extra for making up your missed payment. If you are being careless in payment of your monthly credit fee. Don't think, you will be spared. But, late feeswill be added in the specified credit account of yours. Let us explain this in simple words. We all have seen one harsh teacher in junior high, who was more than a tyrant. What if you had taken a day's off from his class without informing him? Were you forgiven? No! But the next you came you had to pay fine for that missed class. A missed payment works in the same order. Once you miss a single payment. More gets added in your monthly fee to be paid. Once you miss a single payment. You actually pay double. One in the form of a late fee. The other will be your extra minimum monthly payment.
Till now, we have only told you about a single missed payment. But, what if you missed two consecutive payments. Well! mate you are screwed then. Because, it will not only bring a late fee and extra minimum payment on your gate. But, high interest rates will be waiting up for you there too. Yes! This is one thing we all fret about. But, one bitter truth is it is really going to happen. You are for sure going to get double interest rates. The sole reason for this is the high penalty rate which develops if the payment is due over a period of 60 days. So, in case of missing two payments. Prepare yourself for paying up interests as high as sky. With interests, you are obviously required to submit a late fee for two months and a sky-high minimum monthly payment. All these increments are going to affect your finance charges. They will be considerably higher than expected. This is going to disturb your account balance. The balance will get high and high with the passage of each month. Thus, you will find it difficult to pay a larger amount at one single instant. This failure in payment is going to disturb your credit report too. Never think that if you are going to ignore one single payment. It is not going to impact your overall account reports. But, all the details of your late fee payments, extra minimum monthly payments and interest charges will be mentioned. So, the next time you shake off your head carelessly. Remember, the aftermath of this too.
Once you learn your lesson of not paying the payment on time. It is still not over. But, you are going to suffer afterwards. The penalty rate is still going to be in effect because of the earlier missed payments. In other words, once you miss a payment. Besides paying extra payment in the form of a penalty a single time. It won't be over. For consecutive six months, you are supposed to pay the monthly payment according to the set penalty rate. Once the six-months period is over. The effect will immerse. But, if you are willing to make new purchases using your existing credit. The interest rates will be still high. This works both for the new purchases you make as well as multiple credit card purchases. In other words, you will not only be supposed to pay the high interest rates for a single purchase you make. But if you make purchases with different credit cards. The impact is still going to be a hurdle in the way of payment.
We all are afraid of running into our nosey acquaintance who gets into our affairs all the time. Annoying us with his enormous questions. This is the story of every person who in particular frets such people. But what if we tell you that your creditor will start playing the role of such a nosey being? Maybe you won't believe it. But the truth is exactly opposite of your belief. The realistic fact is yes! it is going to happen. Not only this is going to happen but you are going to provide them such a disastrous chance. You must be looking into the hows and whys of that. So, clear your memory a bit and remember your last missed monthly payment. It acts as an emergency signal for your creditors. As soon as they get it, they tend to approach you through every possible means. This can either happen through emailing you or contacting and texting you in person. All sorts of contacts will just include one thing. A reminder about your carelessness. They will remind you about your last missed payment again and again. This whole drama will continue until and unless you don't pay your credit. If you are extremely frustrated regarding these repeated calls. The bad news is you are still not exempted from it. Unlike the debt payment, where you can stop the debt payment reminder under the Fair Debt Collection Practices Act. If you never have come across it earlier, let us clear that to you. According to the above mentioned act, you are allowed to submit a proper official letter highlighting your reason for ignorance. But, don't think it is going to work for you in case of a careless payment. There is no such thing as " reason" when it comes to missing the payment. These "reminder" calls may vary depending upon the duration. At the beginning, these reminders are bearable with gentle notifications. But, soon as the limit exceeds 90 days. The intensity of these calls increase. It is surely going to affect your daily life. Things can get as serious as claiming a charge-off upon you. The consequences can turn up to the label of "credit-default". Once the 90 days time period is exceeded, the issuers can offer you a settlement. Under this settlement offer, you are supposed to pay a big-fat amount as the penalty. This becomes a requisite necessary for giving you a clean-chit. Though, the amount is much larger to pay all at once. Yet, paying a minute percentage of it can at least make you free of the painstaking procedure of the future.
Consider yourself a high school student. Here, you are required to give your best performance in order to get good grades. What do you expect if you didn't prepare well for your exam? Are you going to succeed? No the result is going to be an F. This works in the same way in terms of your credit score. If you are careless enough to pay for your monthly payments. You are missing them on a regular basis. This is going to impact your credit report. With the passage of days, the credit report is going to get worse. No matter if it takes 30, 60, 80, or 120 days. Late payment is going to be a must added factor in your credit report. You know that if the credit report is worse. It means your credit score is going to fall. This can leave certain long-lasting impacts on your overall economic life. Credit card delinquency is going to increase the insurance rate. This can cause hurdles in case you are likely to apply for a job or a rental house in near future. After a period of 180 days, charge-off will be added in your credit report. This charge-off is going to be there in the report for the next six to seven months. Let us get into the anatomy of this procedure. Once you miss a payment on a regular basis, you will be regarded as a credit defaulter. As a credit defaulter, your report will be made based on loss. This loss is regarded as a business loss. Its presence in the credit report tells the monetary institutes that you are not regular in terms of payment. This can get you in grave trouble for the future.
Soon after repeated missed payments, your account is regarded as a charged off account. As a charged off account, your account details will be forwarded to a collection agency. Once it goes to a collection agency. They will collect the debt from you the way they want. One interesting thing regarding getting payments centres your credit card issuer. As the chief operational source. They are at a position to sue you for their payments. Though , statute of limitation can be your rescuer from court proceedings. But it also fulfills certain basic conditions. One of them is your account overall inactivity over a period of time. Secondly, you are supposed to be with the burden of proof. There should be a genuine reason. Otherwise, it is going to be a waste of time.
Consumer credit counselling agencies are of great help in terms of all your queries. You can simply contact one of them. Tell them about the time duration of missing your period. Once your details are mentioned. These agencies can help you a lot in preservation of much revenue.