What’s one late payment, right? Wrong! It may seem like one late payment won’t affect you that much, but it couldn’t be further from the truth. Late payments are detrimental to credit card holders and the consequences aren’t getting any easier. In fact, it seems that credit card companies are getting much stricter on consumers that pay their bills late - even for first time offenders.
You may not have realized it at the time, but when you paid your Target credit card bill late, your Nordstrom’s credit card was probably affected too. That’s right, when you pay one bill late, it’s like a domino effect. All of your credit cards are then affected by the one mistake you made. You will be hit with higher rates and fees on all of your credit cards- not just the one you paid late.
Why is this? Because even one late payment can be seen to your creditors as a risk that you might do the same thing to them. As a result, they raise your interest rates and might even charge you additional fees. This could be very costly for you, depending on how many lines of credit you have.
Let’s review what has happened here - you had one late payment and now you’re paying extra fees on all your lines of credit and your car insurance? It’s true; your car insurance rates might go up if you have even one late payment on your credit card. People with bad credit end up paying 20-50% more in auto insurance than people with good credit. To put it simply, creditors view you as a great risk and aren’t going to extend you credit with low interest rates. If you have bad credit, you’re going to pay for it- no matter what.
The good news is that there are some steps you can take to ensure that you don’t ever pay your credit card bills late and end up with higher payments on all your other cards. First of all, you should keep a list of all of your accounts, payment due dates, balances and credit limits. Second, if you pay rent on the 1st of the month and your credit card bill is due on the 2nd, call the company and have it switched to a date the will be easier on you financially. Third, pay your bills as soon as they arrive. Lastly, review your credit report at least once a year to check for any inaccuracies. If you don’t want to do this yourself, find a reputable credit repair company that can do it for you to keep your credit history healthy!
