What Happens to My Credit Card Rate If I Miss a Payment
Contributed by Melanie Vannuys
What Happens To My Credit Card Rate If I Miss A Payment?
Even if you have a low or 0% interest rate on your credit card, don't get too excited. First of all, check the fine print on your credit card agreement. You will likely find that the great interest rate you currently have will eventually expire. Most card companies that offer you such a low interest rate have done so just to lure you in. Once the introductory period is over, look out! Why do they do this you ask? Because credit card companies make their money off of the interest you pay.
Even with a low or non-existent introductory rate, if you miss one payment or even if you're late - say so long to that great rate! Some credit card companies will jack up your rate to as much as 30% for a late or missed payment or for going over your credit limit. And once you've crossed that line, there's no going back. Add on the late payment or over limit fees and that "little" balance you had is now out of control.
Then, as if all of that isn't bad enough, the credit card company has other goodies up their sleeves. For example, let's pretend that you have a credit card with company A and you have never missed a payment, never been late and never exceeded your credit limit. No worries, right? Wrong! Let's say you also have a credit card with company B but you've missed a couple of payments with them or you've exceeded your credit limit. Guess what?
Company A can raise your interest rate and are completely within their rights to do so! This is why it's so important to read your credit card agreement and know exactly what you're getting into when you choose a credit card company.
