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7 Reasons To Pay Your Credit Card On Time

Every now and then, you may be tempted to delay your credit card payment for a few days, especially when you’re low on cash and have loads of other bills.

The Benefits of Paying Timely Credit Cards

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Sometimes even knowing the consequences only gives you the need to send your credit card on time. You can rationalize late fees, even learn to live with a penalty increase or, worse, choose to take credit for damage from a delayed credit score. But, move those thoughts aside and think about the benefits of paying on time instead.

  • 01 Your accounts remain out of collections.

    credit cards loan More credit card companies are turning to debt collection agencies when their customers do not send credit card payments on time. Even the smallest credit card balance can be sent to a billing agency if it is not paid for several months.

    Once your account is in collections, you no longer have the ability to make minimum monthly payments. The collection agency will require full balance and sometimes additional compensation, as permitted by law. Billing agencies call you repeatedly until you are paid, and you can even place an incorrect account on your credit report. Pay on time and you can avoid dealing with debt collectors.

  • 02 Enjoy lower interest rates.

    A late payment can cost you a low interest rate. Credit card issuers are allowed to increase your interest rate if you are over 60 days late in paying your credit card. The penalty rate on numerous credit cards is a whopping 30%.

    Although the penalty will be if you pay on time for six months in a row, in some cases the penalty rate will continue to apply to new purchases as long as you have that credit card. Paying your credit card on time allows you to run a higher interest rate on credit cards.

  • 03 Avoid delays.

    credit cards loan

    You can only pay a late fee just minutes after your credit card has been paid. Avoid expensive late fees (between $ 15 and $ 35) by sending your credit card on time.

    Make a credit card payment before the payment deadline to avoid the risk of missing payment cut-off time.

  • 04 Improve Your Credit Score.

    Thirty-five percent (35%) of your credit score is based on whether your credit card payments are made on time. Your credit score benefits the most by consistently making credit card payments (and all your other payments) on time.

  • 05 Release your insurance rate.

    Insurance companies are increasingly using your credit score to determine your insurance rates. When late credit card payment lowers your credit score, insurance rates could increase when it is time for your renewal. Sending your credit card on time helps you to get the lowest insurance rate and therefore helps you save money.

  • 06 Do not keep your monthly payments.

    When you pay with a credit card, your next minimum payment will more than double what it would be if you didn’t miss a payment. This is because your next credit card payment will include two minimum payments and a late fee. If you have trouble paying your credit card, delaying it won’t make it easy to pay. Instead, the opposite is happening, and it’s getting harder to get caught.

  • 07 Keep your credit card in good working order.

    The lack of credit card payments puts your credit card at risk of being closed. This could hurt your credit score, especially if you have a credit card. Keep sending your credit card payment on time so your account remains open and in good standing.

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