Missing payments on your credit cards are not something insignificant that you can take lightly. On paper, as a consumer, you should be able to pay each of your installments every month in order not to generate interest rates in the future.
But emergencies can indeed happen; unnecessary expenses can come into your life and affect your planning from one moment to the next. That is why it is always best to be prepared with a contingency plan in case you cannot pay your installments on time.
What if you are only one month late in paying the card?
The bank will most likely contact you if you miss your credit card payment deadline by one month. This will probably be through e-mails, calls, or even postal letters.
You will also be penalized with late fees progressively increasing in value if you miss payments throughout the card’s life. These details can be found in the terms and conditions that arrive when you receive your card.
Depending on who your accreditor is, these fees may increase more or less and may even lead to an increase in your card’s interest rate when you pass 60 days without paying the minimum fee or contacting the bank.
Undoubtedly, the faster you get out of debt, the better. Every penny you pay to the bank can determine whether your credit plan is damaged. That’s why setting up a payment plan with the bank is the best option to initiate a solution as soon as possible.
In most credit companies, the breaking point between being able to accommodate a debt or not is 180 days. This is when companies decide to close the accounts so that the existing debt does not continue to grow.
This does not mean that the debt will remain in the air; in this case, the bank will seek negotiations to reach a point where the debt can be settled in some way or another.
How does this affect my credit history?
Undoubtedly your credit history will be the main element affected by this whole situation. As well as, your very reputation with the bank will leave you with a credit history of between 50 and 150 points. Likewise, your credit history will also have an asterisk for at least seven years after reporting your debt.
This will directly affect the APR of future credit cards you apply for and will make it impossible for you to apply for credit cards at specific banks.
Can you go to jail for not paying off your credit card?
Simply put, the answer is that you cannot go to jail for falling into debt in civil cases. But that doesn’t remove the almost permanent damage that not paying your cards on time can do to your future financial life.
React immediately to late payments
If you cannot make even the minimum payment for one month, don’t panic. Maybe your nerves lead you to think about drastic decisions such as bankruptcy or the consequences that this debt may bring, but it is not so. First things first.
You must contact your credit card company and report the situation. This way, you show your interest in canceling the debt, and you may even have access to solutions with them, such as delaying the late payment report.
Being seen as an interested party by this agency can lead to additional leniency as you work out a payment plan in the future. At the same time, by negotiating directly with the bank, you can protect your credit history from being affected by this unexpected delay.
Analyze internally and explain your situation to the relevant entities
When contacting your supplier, you should explain why you cannot make the minimum payment, how much you can afford to pay, etc. At the same time, you should inform them when you will be able to restart your normal payment schedule and organize it in case it changes.
Therefore, before getting into this situation, you should analyze whether you have budgetary control over card payments. If this is not the case, the best thing to do is to assume your mistake and discuss a solution with the bank to solve the inconvenient situation.
Pokora, Becky. “What To Do If You Can’t Pay Your Credit Card Bill – Forbes Advisor.” Forbes Advisor, Forbes, https://www.forbes.com/advisor/credit-cards/what-to-do-if-you-cant-pay-your-credit-card-bill/.
“What Happens If I Can’t Pay My Credit Card Bills? | Capital One.” Capital One, https://www.capitalone.com/learn-grow/money-management/unable-to-pay-credit-cards-what-happens/.