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Late Payments
The results of not paying debt on time is that
the company will charge a late payment penalty (as high as $40) and report the
late payment to credit rating agencies. Being late on a payment is sometimes
referred to as being in "default". The late payment penalty itself increases the
amount of debt the consumer has. Paying late can damage your ability to increase
your credit limit and in some cases actually reduce your credit limit.
When a consumer has been late on a payment, it
is possible that other creditors, even creditors the consumer was not late in
paying, may increase the interest rates the consumer is paying. This practice is
called universal default. These creditors can reduce your credit limit. |
