By Rick
Your credit card payment is one of the most important considerations in your credit score and even one missed payment can seriously damage your rating. Credit bureaus keep track of how you make your monthly card payment as reported by your lender and missing a payment is a serious credit mistake. Some of these reporting agencies will lower your score by 45 – 110 points for a single missed payment. This infraction can take two years to age off your report so be sure to never miss a payment.
Your interest rate is at risk
Not only will a single missed card payment impact your credit score, it can also change the rate the lender is charging you on your card. Many lenders will trigger a review of your account when a card payment is missed and could decide that you are now a higher risk for them and raise your rate based on this infraction. This will not only apply to the new charges you make with the card but also on any existing balance you have on the card. This can be a huge burden to people carrying a balance from month to month and make it harder to make next month’s payment. The credit bureaus will report this late payment to any other creditors you have as well and it may cause a ripple effect throughout your accounts. Some card member agreements let the lender raise your rates on their card if you miss a payment on any other card.
Double up on your payments
If you’re having a hard time being disciplined with your monthly budget and find yourself coming up short at the end of the month when bills are due, consider making a mid-month payment on your card. This gurantees you are part way to the full payment and will actually help to pay down your balance quicker. Most credit card companies allow you to make several payments each month on an account and may only limit how quickly. In most cases there is a three-day waiting period between payments, which still allows you to easily make several payments each month when you have the extra money.
Consider automated payments every month
All major credit card companies have websites that allow you to make your card payment a little easier. Most of these websites will also allow you to schedule a recurring payment each month to have your card paid automatically. This can be a great feature to use if you know you’re going to pay off your card each month in full or even when carrying a balance. At a bare minimum try and do an automatic payment for the minimum required on your account to ensure you are never late on a payment. You can always make a second payment to reduce your balance further but at least you’ll have the peace of mind in knowing your monthly minimums are covered. Most people try to schedule this automatic payment a few days after their paycheck arrives so you are always sure to have money available to make your payment.
Even if you decide not to use the automatic card payment feature of the website, many sites allow you to set a reminder text or email a few days before your due date. This can be a great way to remind yourself that a payment is due to make sure you get it in on time.
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