Important reasons you should never miss a credit card payment

SO, that time of the month has arrived – your credit card bill is due. You’re not sure if you can pay the total balance, so you’re faced with the awful choice of maybe skipping paying for it. It’s not like your other bills, like electricity, where they’ll cut off their services.

Although it’s an easier choice to skip paying for your credit card dues, the truth is that will have dire consequences for your finances. You should definitely rethink your actions if in case skipping this payment crosses your mind.

Here are five scary scenarios that could happen if you skipped a credit card payment.

1. You might fall into credit card debt

It’s just one payment missed so the consequences can’t be that bad, right? Wrong.

Once you start skipping payments, the unpaid balance will be carried over to the next billing cycle. What makes matters worse is that you’ll be paying the interest ( with rates ranging from 2 percent to 3.54 percent) applied to your total amount due, which is called a finance charge. This includes your remaining balance, along with the outstanding balance.

The compounding monthly interest is going to make it harder for you to completely pay for your credit card bills when it’s due. This is why it can be easy to accumulate debt with simply just one payment.

Other than the finance charge, you’ll also be charged a late payment fee by the bank. This can go as high as 8 percent of the total amount due for each month that you pay past your due date.

Late payment fees will add up to your balance, and they also accumulate interest. So, if you begin missing credit card payments, it should be no surprise that your bills pile up so quickly.

Simply put, you should avoid late payment fees. You should always know when your credit card dues are to be posted to your account. Always check with your provider so you are prepared for the incoming payments that are due.

2. Losing credit card perks

One of the great things about having a credit card is the set of exclusive perks for the cardholders. The thing is, banks require good credit standing, which is making full and prompt payments monthly.

When you skip a credit card payment even for just a day, those points, air miles, and other rewards go.

Some banks still give rewards despite unpaid balances, but it won’t be worth it since the interest you’ll be paying will outweigh the rewards, anyway.

3. Getting your credit card canceled

When you keep missing your monthly payments, you can easily end up losing your card privileges. You must know that credit card providers are allowed by the Banko Sentral ng Pilipinas to suspend or terminate a cardholder’s right to use a card in a case of delinquency. If you haven’t paid for your balance after 90 days from your billing statement, your bank can suspend or terminate your right to use it automatically.

4. Ruining your credit history

You can certainly hurt your credit history if you have unpaid credit card balances. Once you go beyond 90 days past the due date, you will get a permanent negative record.

This comes into play when you try to apply for a car loan or a personal loan down the road. Your lenders will check your history though credit checks, and a negative record can definitely keep you from getting that loan. Once you’re considered a credit risk, it’ll be difficult to get approved.

Final thoughts

Make sure you have taken all the necessary steps in place so that you don’t miss a payment. So, you don’t have to think about it, you can have an auto debit arrangement with the bank so that payments are automated monthly. If you can’t pay the full amount, make sure you at least pay for the minimum balance before or on the due date.

If in case you’ve fallen deep into credit card debt, you should contact your bank and try to negotiate a new repayment schedule that will fit your current situation. You can also try to enroll in a debtrestructuring program that has a low monthly interest rate and a long repayment period.