| Late Vs Never Credit Card Payment |
| By Credit Federal |
Published
01/2/2008
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Financial News
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Late Payment or Default Credit Card Payback
Credit card companies are now on Phase 2 of their annual strategy: Get members to repay their credit card charges.
Each year, every credit card company launches campaigns to get their cardholders to charge holiday purchases onto their credit card versus using cash and especially versus using the cards of their competitors. After the holidays are over, it's time for the second phase of their yearly strategy... to get cardholders to repay the debt.
Although card companies can offer additional rewards to encourage their members to stay active and current on their accounts, at best it's a finger-crossing time of year.
And this year wasn't a high-spending year, either. Actually, spending this season basically met the annual average. Consumers have been having problems repaying their debts even before the major shopping season and now; with added bills and larger credit card debt balances, card issuers face a more troubling period over the next several months. Will cardmembers pay timely? What percentage will be late? Worse, what percentage will default?
Meanwhile, this is prime time for other players to enter the field... noteably credit counseling companies and debt settlement agencies. Typically it would also be a good time of year for mortgage lenders to ramp up debt consolidation loans but; with subprime problems already dragging them down, their opportunities and aggressiveness are likely to be less.
Perhaps the wishes of some debt ladened consumers next year will be: 'Pay my credit card bill for me'.
Late payment vs default: If your credit card payment is late, your card issuer may raise your interest rate and report the late payment to a credit bureau, which could raise the interest rates you on other credit lines you currently have. If you simply default on paying back the credit card company, you face even worse, long term problems. Depending upon how large your debt is and whether or not you already have very bad credit, are factors to consider when choosing between credit counseling to lower monthly bill payments or to negotiate debt settlement to reduce your overall principal debt. For assistance, read about credit counseling vs debt settlement.
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