Although they won’t be charged for it, paying a credit card payment late on a no late fees card can cost consumers in various other ways, according to Credit.com.
Various cards offer no late fees, whether it is only applicable on the first late payment, or for cards that waive all late fees. These five reasons can help consumers decide whether or not to make payments on time even when it won’t add on fees.
Eventually with fees not being paid off on time, the grace period will be forfeited, and all purchases will create interest costs.
Existing debt interest
Interest is calculated based on an average daily balance. Even if the late fee doesn’t exist, any debts not paid off by the due date start accumulating interest. It is safer to pay off the debt a little early, according to the article.
High penalty interest rates apply on some cards. The Clear Card from American Express had a 27.24 percent penalty rate. Compared to the possible $35 for a late fee, this could be pricier than the latter.
Credit agency reports
Late payments affect credit scores because all late payments are reported to credit agencies. Low scores then increase the insurance rates on credit cards, mortgages and any other loans.
There are no cards where payments can stop being made, even if they have no additional fees. Too much delinquency makes issuers suspend or cancel an account.
- Should cash be part of your emergency fund?
- 3 reasons Utah is a great place for students
- Why the CEO of the Container Store pays...
- Top 10 insurance myths that people think are...
- How to take the scare out of the cost of...
- Should you install your own kitchen cabinets?
- 6 ways to jump-start your savings account
- 9 things we routinely overpay for
- Why the CEO of the Container Store pays... 9
- Americans still prefer male bosses 8
- Landlords may be charging pet fees just... 7
- 9 things we routinely overpay for 6
- Employers and job seekers might as well... 5
- Pay raises are more rare despite strong... 4
- Facebook is now helping its female... 4
- Egg freezing is now a perk of the... 4