Missing a credit card payment may not seem like a big deal, but it can easily sink your credit score. When you skip a payment or make a late payment on your credit card, mortgage, or loan, creditors will think that you are not financially responsible. Even if it just happens once or your payment is just a few days late, you can end up in a lot of trouble.
For one, you will be charged a late fee if you pay after the due date. Then, for each month that your payment is late, you will incur additional late fees. Your interest rate will increase, often resetting your interest rate to the penalty APR. This APR can be as high as 29.99%, meaning you will be paying significantly more on your outstanding balance. When your payment is more than 30 days late, the three major credit bureaus will be notified and it will show up on your credit report. Late payments will stay on your credit report for 7 years. Your credit score may then drastically drop. Since your payment history accounts for 35% of your credit score, having a late payment can severely affect your credit score.
So before you skip a payment, think about how it will affect you. And if you have a hard time remembering when your payment is due, set up automatic transfers or payment reminders.
