Credit Card Delinquency: The High Price of Late Payments
It’s 2008; do you know where your interest rates are? If you’ve been even one day late on your credit card payment, you might be surprised by the jump your interest rate has taken. Even card holders with good credit scores are being heavily penalized for late payments – sometimes as high as 30% interest.
The card issuers argue that the mortgage crisis is leaving them with too many delinquent card holders, and that they should have the right to regulate their own industry and set interest rates for late payments. The problem with this, according to the government and plenty of card holders, is that the card companies are being unreasonable when they charge the maximum interest rate to all late payers – including good customers who have only missed one payment during the life of their account.
These penalty interest rates can stick around, too; when I was late on a card payment back in January of 2007, I watched my interest rate go from 12% to 29% for the next six months.
If you are unable to make a payment, the best thing to do is let your card company know right away. They will work with you by taking a partial payment or deferring your payments in certain circumstances. This can save you lots of stress (and money) in the long run!
