Consequences of a late credit card payment

Jul 14, 2020
credit cards
By Staff writer

Missing a credit card payment can happen to the best of us. Whether it’s because you’re struggling with other expenses or you’re just not keeping track of your spending, it’s time to make a change and get on top of your credit card payments.

The consequences of not paying them on time can be greater than you may think, with your credit score, rewards and interest rates likely to take a bit hit. 

What are the consequences of not paying your credit card bill on time?

Your credit card payment is considered late if it’s received after the due date or if it’s less than the minimum amount you’re owing.

The consequences of this depends on the circumstances, here’s just a few of the consequences of making a late payment for your credit card balance. 


Person paying their credit card bill late

You will be charged a late fee

This is one of the penalties that applies for late payments. It will appear on your next billing statement for late/missed payments and this could be around $15 depending on the late fee policy.

You’ll want to avoid this one as if you’re already struggling to pay off your other expenses, a late fee is the last thing you’ll want to see.

Your credit card provider will be the one to determine this fee so you should spend time comparing credit cards in NZ to see what the late fees for each provider are.  

The interest rate you pay will increase if you fail to pay after a certain period 

After a lengthy period of failing to pay off your credit card in NZ, your bank can simply increase the interest rate. This means you’ll owe even more interest per month as they’ll most likely put you up to the penalty rate which is the highest rate you can get on a credit card.

These costs will add up the more you delay your credit card payments so your priority should be to pay the balance off before the 60 day mark.

They do this not just as a punishment for you, but also to reflect the amount of risk they have by letting you pay for things on their account.

It will negatively affect your credit score and credit report

This is a big one. Failing to pay off your credit card balance in NZ, will harm your credit score and will stay in your credit history. This is far from ideal seeing as how important credit scores can be.

This can negatively affect your chances for getting things like loans, flats, houses and more as it provides an indication that you have struggled to pay your debts in the past.

This can stay on your credit report for years - so missing a credit card payment for a long time period may mean you’ll have to say goodbye to any future loans.

Your rewards may be affected

The rewards that you enjoy so much from your credit card may be forfeited after you’ve failed to pay off your credit card.

This means all of the FlyBuys points, hotpoints and any other rewards you may have accumulated will all go to waste if you’re negligent with your credit card payments. 

Your credit card could end up being defaulted

After 60 days, if you still have a balance owing of more than $150, your credit card could be defaulted. This basically means that your bank will write off the amount owing and report it as a loss for them.

What this means for you, is that this will be marked down on your credit report and can stay there for up to 5 years.

This should be avoided at all costs as to not affect your future ability to do things like take out loans and have a place to rent. 



What can you do if you haven’t paid your credit card off in time?

If you’ve already missed the due date for your credit card balance, or you know in advance that you won’t be able to when the time comes, just keep calm as there are few things you can do to handle the situation before it gets worse. 

Get in contact with your bank/credit card provider

This is the first step you should do. Just talk to them, let them know that you have a balance owing and when you think you’ll be able to pay it off.

This way, you’re giving them a degree of trust by owning up to the balance that you owe and being upfront about it, so they’ll be less likely to give such harsh consequences.

Whether you have a BNZ credit card, ANZ credit card or Westpac credit card, it shouldn’t matter and your credit card provider will be more likely to cut you some slack for getting in contact with them.  

Find a solution with your credit card provider

You can find a different way to be able to pay off your credit card balance, with the help of your credit card provider. They can put you on an alternative payment plan that will make it easier for you to be able to pay it off. 

Easy ways to make sure you pay your credit card bill on time

Use automatic payments

With all of the greatest advancements in technology over the last few decades, automatic payments have been one of the greatest.

If you’re paying off the balance in one full payment that’s completely fine, however if you’re paying it off weekly or monthly, automatic payments can be a life saver.

Allowing you to make payments weekly or monthly automatically means that you won’t have to remember to pay the amount each time, leaving little chance of you forgetting. 

Pay off your credit card balance before you go overseas

Many times when people cannot pay their credit card bill, it’s because they’ve gone on holiday overseas and are struggling with the expenses of travels.

A smart way to deal with this is to just simply pay the bill before you go overseas, so that it’s paid before the due date and you won’t have to worry about it on your time away!

Make sure you have a credit card that suits your needs

One thing to consider is whether you have the best credit card for your requirements.

For example, if you don’t use your credit card much yet you have a high annual fee and high interest rate then it probably makes sense to switch to a different credit card. Using glimp, you can compare credit cards nz from different banks such as BNZ, ANZ and Westpac

To conclude

Credit cards are very useful in today’s world, allowing you to buy the things you need while you can pay for them later. They’ve become so popular that consumers are now spending more money with their credit cards than with cash!

However, it’s important to make sure that you pay your credit card bill when it’s due otherwise you may have to pay even more and it can have a negative future impact. 

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