Tag Archives: credit

Late Credit Card Payments – What to do!

pastdue credit card payment

Late credit card payments happen to all of us. Sometimes life gets busy and the due date was missed or maybe it was a little bit of a struggle to come up with enough money for all the monthly bills. In any case, missing a payment could have a negative impact on your credit score. Here is some great information and steps to take as soon as you realize the bill was late:

1. Make Your Payment As Soon As Possible

If you’re late on a credit card payment or missed it altogether, don’t just wait for the next bill to come. Make a payment on your card as soon as possible. The sooner you do, the less chances it will have a negative impact on your credit score.

Here’s what you need to know about credit scores and late payments: a payment is typically reported to the credit bureaus if it’s 30, 60, or 90 days late. But if you get your payment in before that 30 days, you can rectify the situation before it hits your report.

2. Call Your Credit Card Issuer and Ask them to Waive the Fee

Believe it or not, if you were charged a fee for your late payment, there’s a good chance you can get it waived. Simply make your payment and call your credit card issuer. Tell them that it was a mistake and not one you intend to repeat, and chances are they’ll take the fee right off for you.

Here’s what not to do when you call: Don’t give a sob story. Don’t try to tug at their emotions or their sympathy. Don’t get angry. Don’t tell them all the details about your life and your finances. This won’t work.

Instead, be courteous and professional. Tell them that it was a mistake and that you have now made your payment, and since you’ve been a loyal customer for so long you’d greatly appreciate it if they remove the fee. Keep it simple and polite and your chances will be much better.

3. Make A Plan to Prevent this From Happening Again

Late payments happen to everyone – that’s one reason credit card companies are decently fair about removing fees. We all make mistakes sometimes!

But if it happens over and over again, then it will turn into a much larger problem. Continually missing payments could lead to a hike in your APR, less cooperation on fee removal, and even eventual default. If the latter happens, you’ll see a major dip in your credit score and you’ll have to deal with debt collection agencies.

A mistake happens once – but three, five, ten times is a habit. That’s why it’s important to make a plan of action now. The more you can do to prevent this from happening again, the better off you’ll be.

For more information: https://www.mybanktracker.com/credit-cards/advice/what-to-do-if-miss-credit-card-payment-19429

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Ways to Pay Down Your Debt

Paying down debt is something we all want to know more about. How can we do it faster and in a way that is manageable? Carol Riggles, IHA’s Homeownership Program Manager, has two ways to pay down your debt faster!

There are two great ways to pay down debt faster. One way suggests that you should choose the credit card with the lowest balance and pay it off first and the other way recommends that you choose the card with the highest interest rate to pay off first.  Both methods expect you to continue paying the same monthly payment regardless of whether you are required to do so, and both also assume that you are not still using the cards.  (Keep in mind that you should use a credit card at least once a year to keep the account active, but only charge something for $10 or less so that your goal to pay off your balances stays on course!)

Here is how it works:

Method One – Select card with lowest balance.

  • Pay minimum payment on all cards except this one and pay as much as you can afford each month until it is paid off.
  • Then start doing the same for the next card with the lowest balance, but now you are adding the monthly amount you were paying on the paid off card to the amount you are required to pay.
  • For example – Card One has a $400 balance and an interest rate of 17% and you can afford to pay $60 a month.  Card Two has a $1,000 balance and a 21% interest rate and the minimum payment is $30.  Card One gets paid off in about 8 months, and then you start paying $90 a month to pay off Card Two.  The balance on Card Two is now about $894 and paying $90 a month will take 12 months to pay off the debt completely.  The whole process took 20 months.

Method Two – Select the card with the highest interest rate.

  • Using the same examples as in Method One, Card One has a $400 balance and an interest rate of 17% and a minimum payment of $30.  Card Two has a $1,000 balance and a 21% interest rate and you can afford to pay $60 a month.  In 15 months, Card One is paid off and then you add the $30 to the $60 you are paying on Card Two, and 4 months later you are paid off completely and you have $72 to put into savings because the balance on Card Two was only $18 on the 19th payment.
  • You are accustomed to paying $90 a month, so start adding this amount to your savings every month to build up an emergency fund so you won’t have to reach for your credit card as often!

There are lots of calculators online to help you with your calculations.

Here’s one: http://www.creditcards.com/calculators/payoff.php

Building your credit and paying down your debt can assist individuals on their pathway to homeownership!