Paying your bills late is not a good habit. Sometimes, it may cost you heavily. The delay is also not advisable due to the high-interest cost. You must ensure that you automate your payment and continue paying your credit card bills on time. It helps you in two ways – credit card companies give you enhanced credit limits, and your credit score improves gradually.
Here is why you should avoid delayed payments.
Late Fees: One of the biggest reasons to pay your credit card bill on time is to avoid late fees. Late fees can be expensive and can add up quickly, especially if you are consistently late on your payments.
Credit Score: Delaying your credit card payment can hurt your credit score. Late payments can stay on your credit report for up to seven years, and can negatively impact your credit score, making it harder to get approved for credit in the future.
Higher Interest Rates: When you are late on your credit card payment, the credit card company may increase your interest rate, which can add up over time and increase the total amount you owe.
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Collection Calls: If you are consistently late on your payments, the credit card company may start calling you to collect the debt. This can be stressful and time-consuming and can negatively impact your mental health.
Save Money: By paying your credit card bill on time, you can save money in the long run. Late fees and higher interest rates can add up quickly and can make it harder to pay off your debt.
Credit History: Your credit history is important when it comes to getting approved for credit in the future. By paying your credit card bill on time, you can protect your credit history and improve your chances of getting approved for credit.
Legal Action: If you are consistently late on your credit card payments, the credit card company may take legal action against you to collect the debt. This can be time-consuming and expensive, and can negatively impact your financial future.
Relationships: Delaying your credit card payment can cause stress and strain on your relationships. By paying your bills on time, you can avoid unnecessary stress and maintain positive relationships with your loved ones.
Financial Health: Paying your credit card bill on time is a sign of good financial health. By staying on top of your payments, you can improve your financial situation and achieve your financial goals.
Peace of Mind: Knowing that you are paying your bills on time can provide peace of mind and reduce stress in your life. By prioritizing your payments, you can enjoy a greater sense of financial security and stability.
Adhil Shetty, CEO, Bankbazaar.com, explains, “Your credit score is a measure of your ability to pay your past loans and bills. A lower score – anything under 750 – implies you have had troubles paying your loans or bills on time. This reduces your creditworthiness. Make timely payments and avoid spending what you cannot afford to pay on time.”
These tips will help you improve your credit score and lenders will also feel safe lending money to you whenever you are in need.