Credit card is loved by many, as you get to borrow money and yet have sufficient number of days to pay the bill and even an option to pay minimum balance. In addition to this, there are many benefits offered by card issuers to their customers such as discounts while shopping online, cashback, reward points, fuel surcharge waiver and many more. For those who pay credit card bills on-time the benefits are further more. But there are individuals who miss paying the credit card bills before the due date. There could be many reasons for this missed payment such as:

• Paucity of funds: This is the most common reason for credit card late payment. Again this condition can arise due to medical emergency, lay-off and many other reasons.
• You did the payment on the last date but through cheque/demand draft which took time in processing.
• You made the payment but due to technical reason the same was not processed. Again this can be a fault at your end or at the bank’s.
• You are travelling at the time of due date and did not have access to make payments.
• You forgot to make the payment. Check out how to avoid missed payments.

What happens when credit card payment is made late?

Frequently missing your card payment knowingly or unknowingly is an invitation to the lenders to tag you as a defaulter.

Effects of late credit card payment are:

• Credit score is impacted increasing the chances of loan or credit card application denied. A poor or low CIBIL score is an invitation to future financial trouble. Read tips on getting credit card when you have poor score.
• Credit limit is slashed
• Credit card can get cancelled
• Interest rate will be increased
• Your card account will be classified as a non-performing asset (also called as delinquent in banking terminology).
• You will be blacklisted by the banks.
• Recovery agents (in-house by the banks or third party agencies recruited by the banks) will start harassing you over phone any time during the day. This mostly happens when the overdue payment is very high.

Apart from the above effects, late payment charges are levied by the banks as follows.

As mentioned in the above table, as the due amount increases the late payment charges also increase. the charges also depend on the due amount and type of card you have chosen. Readers are requested to verify the details as card companies often keep on changing their terms and conditions.