Let’s face it. We all have a tendency to procrastinate every now and then. Simple things like not doing the dishes until you get boinked over the head with a saucepan or failing to pay the paper boy his due until he decides to leave a smelly, brown paper bag on your door step are quite commonplace.
However, taking your own sweet time when it comes to dealing with financial matters is an entirely different ball game altogether. While you’re busy tossing away your monthly Credit Card bill on top of a pile of mail that’s been gathering dust on your dining table, take a moment to think about what might happen if you dilly-dally on making your payments on time.
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The last thing you need is a Credit Card collections agent landing up at your doorstep while you’re busy trying to stretch your toes to drag the T.V remote over to you. If that doesn’t make you break out in a cold sweat (the agent, not you stretching for the remote) then maybe these 6 effects your procrastination could have on your finances will.
Late Payment Fees
Late payment fees are the first salvo. The bank usually levies a late payment fee if you fail to make your Credit Card monthly payment by the time the due date has passed. These fees are also levied if you are unable to meet the minimum due amount. In fact, there really is no way you can avoid these fees even if you somehow manage to take some time out from snoring away on your couch and clear all your dues in one go.
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Interest Rate Hike
By dawdling on your Credit Card payments you also run the risk of paying far more interest on your Credit Card than you did before. If you have failed to make your Credit Card payments on time, but still have the cojones to use it to make purchases, then there’s every chance that the rate of interest charged on your purchases may increase. In fact, the bank may even raise the interest rate on any EMIs or withdrawals you might make using your Credit Card.
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Reduction of Credit Limit
If you make a habit of not paying your outstanding Credit Card dues on time, then you can kiss your Credit Limit goodbye. Banks have low tolerance for procrastinators in this matter. If you continue to default on your payments then you will certainly see you Credit Limit reduce drastically, which could put you in a spot of bother, especially if you’re dependent on your Credit Card to make your utility payments, grocery purchases and pay for your other expenses.
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Withdrawal of Credit Period
One of the biggest and most damaging consequences of failing to make your Credit Card payments on time is the withdrawal or removal of your interest-free credit period by the bank. This means that you won’t be given any more leeway when it comes to clearing your dues. The longer you procrastinate, the more interest you get charged as the days go by.
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Negative Effect On Credit Score
Just like no one can trust a procrastinator to do things on time, neither do banks when it comes to giving out Loans like Personal Loans, Home Loans or Car Loans. Constant defaults on your Credit Card payments can have a drastic negative effect on your Credit Score, which could see banks reject any future Loan applications you may have.
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If you thought getting clonked on the head with a saucepan was a pain in the proverbial behind, then you haven’t dealt with Credit Card collection agencies yet. If you haven’t made your Credit Card payment for more than 90 days then you could receive a visit from some unwanted guests – the bank’s recovery agents or an outside collections agency and they’re going to keep visiting until you pay up. Definitely not something you need in your life.
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Hopefully, this should keep you from procrastinating any longer. So, clear your Credit Card dues as soon as possible and you can get back to stretching every sinew in your body for that T.V remote.
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