Don't ever miss a minimum credit card payment
5-Dec-23 12:39pm
#1 Staraang
I've never missed a credit card payment in my life. I recently got a credit monitoring alert that stated I was delinquent on a payment. That was news to me so I went back and checked. Turned out there was a small balance (~$50) on a credit card that I rarely use anymore that I didn't know about. The charges were for electric car charging because I had forgotten to change the credit card info on the app when I switched over to my current regular cards.
I immediately paid the balance. However my credit score dropped by >100 points. I ended up talking to the bank last week and explaining the error was unintentional and they were fairly sympathetic. Today they let me know they would remove the derogatory mark on my credit report which is great news since we were planning on possibly purchasing a home next year. Had me pretty nervous there for a while though.
Moral of the story is set your credit cards for automatic payments for at least the minimum due. If you have multiple credit cards it's easy for this issue to arise especially if you have some infrequent recurring charge that you forgot about.
#1 Staraang
I've never missed a credit card payment in my life. I recently got a credit monitoring alert that stated I was delinquent on a payment. That was news to me so I went back and checked. Turned out there was a small balance (~$50) on a credit card that I rarely use anymore that I didn't know about. The charges were for electric car charging because I had forgotten to change the credit card info on the app when I switched over to my current regular cards.
I immediately paid the balance. However my credit score dropped by >100 points. I ended up talking to the bank last week and explaining the error was unintentional and they were fairly sympathetic. Today they let me know they would remove the derogatory mark on my credit report which is great news since we were planning on possibly purchasing a home next year. Had me pretty nervous there for a while though.
Moral of the story is set your credit cards for automatic payments for at least the minimum due. If you have multiple credit cards it's easy for this issue to arise especially if you have some infrequent recurring charge that you forgot about.
5-Dec-23 1:41pm
#3 shadyfozzie
1) never sign up for paperless billing.. that's how they getcha
2) Check your statements/credit score once a month (or get an alert on your phone that monitors it)
3) If this ever happens, call them. Like Starrang said, they are pretty lenient if you don't abuse it.. Once I had a balance of $81 or so and accidentally punched it in as 18. A few days later I got an alert and called them.. they siad don't worry about it and that it was taken care of.. Just don't make it a habit and they are pretty good with working with you.
4) As Porksta said, unless you have 0% interest and a strict monthly payment plan, never pay the minimum (unless you are putting the majority of the money towards another card, ala the snowball effect).
#3 shadyfozzie
1) never sign up for paperless billing.. that's how they getcha
2) Check your statements/credit score once a month (or get an alert on your phone that monitors it)
3) If this ever happens, call them. Like Starrang said, they are pretty lenient if you don't abuse it.. Once I had a balance of $81 or so and accidentally punched it in as 18. A few days later I got an alert and called them.. they siad don't worry about it and that it was taken care of.. Just don't make it a habit and they are pretty good with working with you.
4) As Porksta said, unless you have 0% interest and a strict monthly payment plan, never pay the minimum (unless you are putting the majority of the money towards another card, ala the snowball effect).
5-Dec-23 3:02pm
#4 Staraang
I always pay my full balance. My point was more about having automatic payments set so that you can avoid becoming delinquent unwittingly. I’m a little surprised the bank didn’t make an attempt to warn me about the delinquent payment before reporting to credit bureaus. I figured they would prefer to collect on money owed before taking other steps. I would’ve paid them right away if they just sent me an email or letter.
One more thing, my bank’s website specifically said they don’t do goodwill adjustments but I still asked them very politely and apologetically and they ended up doing one for me. So don’t lose hope if your bank says they won’t do it on their website. It doesn’t hurt to request one. I emailed my bank’s CEO in addition to calling customer service.
#4 Staraang
I always pay my full balance. My point was more about having automatic payments set so that you can avoid becoming delinquent unwittingly. I’m a little surprised the bank didn’t make an attempt to warn me about the delinquent payment before reporting to credit bureaus. I figured they would prefer to collect on money owed before taking other steps. I would’ve paid them right away if they just sent me an email or letter.
One more thing, my bank’s website specifically said they don’t do goodwill adjustments but I still asked them very politely and apologetically and they ended up doing one for me. So don’t lose hope if your bank says they won’t do it on their website. It doesn’t hurt to request one. I emailed my bank’s CEO in addition to calling customer service.
5-Dec-23 8:33pm
#5 KCPenguins
1) Paperless billing... I had a bill get delivered close to due date. It was mailed before due. They tried to charge me late fees.
2) Don't buy anything on a CC unless you can pay it off at the end of the month, plan to buy everything you can afford on a CC that you can pay off at the end of the month if they have cash back. This takes control and budgeting.
3) If 1 fails and you've been a responsible CC user, call them. Start off nice, then threaten to leave if they don't fix it. I would not hesitate to leave a CC company that won't fix issues beyond your control.
#5 KCPenguins
1) Paperless billing... I had a bill get delivered close to due date. It was mailed before due. They tried to charge me late fees.
2) Don't buy anything on a CC unless you can pay it off at the end of the month, plan to buy everything you can afford on a CC that you can pay off at the end of the month if they have cash back. This takes control and budgeting.
3) If 1 fails and you've been a responsible CC user, call them. Start off nice, then threaten to leave if they don't fix it. I would not hesitate to leave a CC company that won't fix issues beyond your control.
6-Dec-23 9:07am
#6 SublimeFan
Staraang wrote:
I’m a little surprised the bank didn’t make an attempt to warn me about the delinquent payment before reporting to credit bureaus. I figured they would prefer to collect on money owed before taking other steps. I would’ve paid them right away if they just sent me an email or letter.
I don't know if I understand - but I'm far from an expert in the field. Did you credit score ACTUALLY drop, or was it going to drop? I didn't think that once delinquent marks are reported, that they can easily be removed, even if by the reporter. Essentially, I thought the power is out of the hands of the bank once it is reported.
To another point - this thread has a ton of great advice regarding credit. Sorry this happened, Staraang, but happy to see you were able to recover with appropriate action.
#6 SublimeFan
Staraang wrote:
I’m a little surprised the bank didn’t make an attempt to warn me about the delinquent payment before reporting to credit bureaus. I figured they would prefer to collect on money owed before taking other steps. I would’ve paid them right away if they just sent me an email or letter.
I don't know if I understand - but I'm far from an expert in the field. Did you credit score ACTUALLY drop, or was it going to drop? I didn't think that once delinquent marks are reported, that they can easily be removed, even if by the reporter. Essentially, I thought the power is out of the hands of the bank once it is reported.
To another point - this thread has a ton of great advice regarding credit. Sorry this happened, Staraang, but happy to see you were able to recover with appropriate action.
6-Dec-23 9:46am
#7 benstylus
Reporting to bureaus and sending to collections are two different things. Card issuers will regularly report to bureaus whether it's good (monthly payments made on time) or bad news (late payment, seriously late payment, etc). They will almost always try to contact you before selling your account to a collections agency though.
Watch out for your rate - some cards will push you into a much higher "penalty" rate if you miss or are late with a payment. And with interest rates already being high as is, that's another good reason to keep your balance low or ideally pay it off completely every month.
#7 benstylus
Reporting to bureaus and sending to collections are two different things. Card issuers will regularly report to bureaus whether it's good (monthly payments made on time) or bad news (late payment, seriously late payment, etc). They will almost always try to contact you before selling your account to a collections agency though.
Watch out for your rate - some cards will push you into a much higher "penalty" rate if you miss or are late with a payment. And with interest rates already being high as is, that's another good reason to keep your balance low or ideally pay it off completely every month.
6-Dec-23 10:01am
#8 John
I agree with most of the above -- especially the "only charge what you can afford and pay it off in full every month."
I get a LOT of benefits (airline miles, hotels, whatever) from credit card deals -- but those only really work if you pay the statement balance in full every month so that you never pay any fees or interest.
The only thing I really disagree with above is the "no paperless billing" stuff. I have ALL of my stuff (credit cards, utilities, whatever I can) on paperless billing. I don't need any physical mail -- it is such a waste.
If you want to review things, then log in and do it any time.
But I don't see that paperless billing is "how they get you." It's not some trick.
#8 John
I agree with most of the above -- especially the "only charge what you can afford and pay it off in full every month."
I get a LOT of benefits (airline miles, hotels, whatever) from credit card deals -- but those only really work if you pay the statement balance in full every month so that you never pay any fees or interest.
The only thing I really disagree with above is the "no paperless billing" stuff. I have ALL of my stuff (credit cards, utilities, whatever I can) on paperless billing. I don't need any physical mail -- it is such a waste.
If you want to review things, then log in and do it any time.
But I don't see that paperless billing is "how they get you." It's not some trick.
6-Dec-23 10:03am
#9 John
Oh, and @Staraang -- I did almost the same thing last year! I had a hotel credit card that I didn't use any more, but keep it because it has a free night stay every year for only a $49 annual fee. For some reason, I hadn't set up auto-pay on that card. So, my annual $49 fee came -- which was the only thing on the card -- and I didn't pay it. I didn't notice until a couple of months later!
I then immediately paid it, set up autopay, and then called them. Because it was my only late payment, they were cool about it and removed all fees and the late report -- just like you. So, yes, always ask! Especially if it really is a rare occurrence!
#9 John
Oh, and @Staraang -- I did almost the same thing last year! I had a hotel credit card that I didn't use any more, but keep it because it has a free night stay every year for only a $49 annual fee. For some reason, I hadn't set up auto-pay on that card. So, my annual $49 fee came -- which was the only thing on the card -- and I didn't pay it. I didn't notice until a couple of months later!
I then immediately paid it, set up autopay, and then called them. Because it was my only late payment, they were cool about it and removed all fees and the late report -- just like you. So, yes, always ask! Especially if it really is a rare occurrence!
6-Dec-23 10:28am
#10 Porksta
I remember a thread on Reddit regarding scummy things companies did while you worked for them. One response was a person that worked for a credit card company that did not issue statements at all. People would call (this person worked customer support) and complain that they missed their payment because they never got a statement. Person had to reply that statement issuances are only a courtesy and are not required. Obviously the intent of the company was to not issue statements so people would rack up interest charges.
#10 Porksta
I remember a thread on Reddit regarding scummy things companies did while you worked for them. One response was a person that worked for a credit card company that did not issue statements at all. People would call (this person worked customer support) and complain that they missed their payment because they never got a statement. Person had to reply that statement issuances are only a courtesy and are not required. Obviously the intent of the company was to not issue statements so people would rack up interest charges.
6-Dec-23 10:59am
#11 SublimeFan
benstylus wrote:
Reporting to bureaus and sending to collections are two different things. Card issuers will regularly report to bureaus whether it's good (monthly payments made on time) or bad news (late payment, seriously late payment, etc). They will almost always try to contact you before selling your account to a collections agency though.
I appreciate the explanation. I WOULD like to understand why my credit score bounces +/- 3 pts while I make all payments on time, don't open up new accounts, or close old ones. Chase's tools never provide a good explanation - utilizing more of my overall credit, maybe? Always pay balance in full and on time.
#11 SublimeFan
benstylus wrote:
Reporting to bureaus and sending to collections are two different things. Card issuers will regularly report to bureaus whether it's good (monthly payments made on time) or bad news (late payment, seriously late payment, etc). They will almost always try to contact you before selling your account to a collections agency though.
I appreciate the explanation. I WOULD like to understand why my credit score bounces +/- 3 pts while I make all payments on time, don't open up new accounts, or close old ones. Chase's tools never provide a good explanation - utilizing more of my overall credit, maybe? Always pay balance in full and on time.
6-Dec-23 11:00am
#12 Porksta
Nobody knows the exact math behind a credit score. Doing so would make it too easy to game. All we know are guidelines and hints.
#12 Porksta
Nobody knows the exact math behind a credit score. Doing so would make it too easy to game. All we know are guidelines and hints.
6-Dec-23 12:57pm
#13 Orlandu
SublimeFan wrote:
benstylus wrote:> Reporting to bureaus and sending to collections are two different things. Card> issuers will regularly report to bureaus whether it's good (monthly payments made> on time) or bad news (late payment, seriously late payment, etc). They will almost> always try to contact you before selling your account to a collections agency though.> > I appreciate the explanation. I WOULD like to understand why my credit score bounces +/- 3 pts while I make all payments on time, don't open up new accounts, or close old ones. Chase's tools never provide a good explanation - utilizing more of my overall credit, maybe? Always pay balance in full and on time.
Credit scores always fluctuate a little due to utilization rate. A portion of your credit score is determined by how much of a balance you have on your cards relative to your total available credit. Paying your bills on time won't matter because the score could be calculated in the middle of a billing cycle. Mine always drops a bit around Christmas due to seasonal buying.
#13 Orlandu
SublimeFan wrote:
benstylus wrote:> Reporting to bureaus and sending to collections are two different things. Card> issuers will regularly report to bureaus whether it's good (monthly payments made> on time) or bad news (late payment, seriously late payment, etc). They will almost> always try to contact you before selling your account to a collections agency though.> > I appreciate the explanation. I WOULD like to understand why my credit score bounces +/- 3 pts while I make all payments on time, don't open up new accounts, or close old ones. Chase's tools never provide a good explanation - utilizing more of my overall credit, maybe? Always pay balance in full and on time.
Credit scores always fluctuate a little due to utilization rate. A portion of your credit score is determined by how much of a balance you have on your cards relative to your total available credit. Paying your bills on time won't matter because the score could be calculated in the middle of a billing cycle. Mine always drops a bit around Christmas due to seasonal buying.
6-Dec-23 1:46pm
#14 John
Porksta wrote:
I remember a thread on Reddit regarding scummy things companies did while you worked for them. One response was a person that worked for a credit card company that did not issue statements at all. People would call (this person worked customer support) and complain that they missed their payment because they never got a statement. Person had to reply that statement issuances are only a courtesy and are not required. Obviously the intent of the company was to not issue statements so people would rack up interest charges.
Ok, but this is very much an exception. Don't get credit cards from crap companies. No real credit card companies (Chase, Capital One, AMEX, BoA, Citi, etc.) do anything like that at all.
In other words, people don't need to worry about going paperless with almost any of the normal credit card companies.
#14 John
Porksta wrote:
I remember a thread on Reddit regarding scummy things companies did while you worked for them. One response was a person that worked for a credit card company that did not issue statements at all. People would call (this person worked customer support) and complain that they missed their payment because they never got a statement. Person had to reply that statement issuances are only a courtesy and are not required. Obviously the intent of the company was to not issue statements so people would rack up interest charges.
Ok, but this is very much an exception. Don't get credit cards from crap companies. No real credit card companies (Chase, Capital One, AMEX, BoA, Citi, etc.) do anything like that at all.
In other words, people don't need to worry about going paperless with almost any of the normal credit card companies.
6-Dec-23 9:34pm
#16 Staraang
SublimeFan wrote:
Staraang wrote:> I’m a little surprised the> bank didn’t make an attempt to warn me about the delinquent payment before reporting> to credit bureaus. I figured they would prefer to collect on money owed before taking> other steps. I would’ve paid them right away if they just sent me an email or letter. I don't know if I understand - but I'm far from an expert in the field. Did you credit score ACTUALLY drop, or was it going to drop? I didn't think that once delinquent marks are reported, that they can easily be removed, even if by the reporter. Essentially, I thought the power is out of the hands of the bank once it is reported. To another point - this thread has a ton of great advice regarding credit. Sorry this happened, Staraang, but happy to see you were able to recover with appropriate action.
Thanks, man. I was panicking a bit initially but things turned out well thankfully. The bank was pretty cooperative because of my prior record of not missing payments plus the fact that it was a small balance.
And my score actually dropped. The delinquent mark can be removed by the reporter, fairly easily it appears. I think the credit bureaus allow this flexibility since mistakes are made frequently on credit reports which can be quite damaging. I was told that the update should be apparent within a couple of weeks.
John wrote:
Oh, and @Staraang -- I did almost the same thing last year! I had a hotel credit card that I didn't use any more, but keep it because it has a free night stay every year for only a $49 annual fee. For some reason, I hadn't set up auto-pay on that card. So, my annual $49 fee came -- which was the only thing on the card -- and I didn't pay it. I didn't notice until a couple of months later! I then immediately paid it, set up autopay, and then called them. Because it was my only late payment, they were cool about it and removed all fees and the late report -- just like you. So, yes, always ask! Especially if it really is a rare occurrence!
Ha, glad to hear I'm not the only one who did this. And glad to hear it worked out for you as well. I just don't understand why they didn't reach out to me sooner. Do these banks not want their money? I think this is one of the pitfalls of having multiple credit cards that we have to be careful about especially when it's a card you don't use.
#16 Staraang
SublimeFan wrote:
Staraang wrote:> I’m a little surprised the> bank didn’t make an attempt to warn me about the delinquent payment before reporting> to credit bureaus. I figured they would prefer to collect on money owed before taking> other steps. I would’ve paid them right away if they just sent me an email or letter. I don't know if I understand - but I'm far from an expert in the field. Did you credit score ACTUALLY drop, or was it going to drop? I didn't think that once delinquent marks are reported, that they can easily be removed, even if by the reporter. Essentially, I thought the power is out of the hands of the bank once it is reported. To another point - this thread has a ton of great advice regarding credit. Sorry this happened, Staraang, but happy to see you were able to recover with appropriate action.
Thanks, man. I was panicking a bit initially but things turned out well thankfully. The bank was pretty cooperative because of my prior record of not missing payments plus the fact that it was a small balance.
And my score actually dropped. The delinquent mark can be removed by the reporter, fairly easily it appears. I think the credit bureaus allow this flexibility since mistakes are made frequently on credit reports which can be quite damaging. I was told that the update should be apparent within a couple of weeks.
John wrote:
Oh, and @Staraang -- I did almost the same thing last year! I had a hotel credit card that I didn't use any more, but keep it because it has a free night stay every year for only a $49 annual fee. For some reason, I hadn't set up auto-pay on that card. So, my annual $49 fee came -- which was the only thing on the card -- and I didn't pay it. I didn't notice until a couple of months later! I then immediately paid it, set up autopay, and then called them. Because it was my only late payment, they were cool about it and removed all fees and the late report -- just like you. So, yes, always ask! Especially if it really is a rare occurrence!
Ha, glad to hear I'm not the only one who did this. And glad to hear it worked out for you as well. I just don't understand why they didn't reach out to me sooner. Do these banks not want their money? I think this is one of the pitfalls of having multiple credit cards that we have to be careful about especially when it's a card you don't use.
7-Dec-23 9:01pm
#17 Feeb
Never use credit. Try your best to save and buy and do not owe. Even your car etc.
Your credit score is just a license to borrow more and get into trouble. You don’t really need it- unless you want to owe.
#17 Feeb
Never use credit. Try your best to save and buy and do not owe. Even your car etc.
Your credit score is just a license to borrow more and get into trouble. You don’t really need it- unless you want to owe.
7-Dec-23 9:11pm
#18 nonamesleft
Feeb wrote:
Never use credit. Try your best to save and buy and do not owe. Even your car etc. Your credit score is just a license to borrow more and get into trouble. You don’t really need it- unless you want to owe. I was telling someone this when I saw a furniture store that said 0 down for a long time. I said that if you can't afford the piece of furniture right now, then you don't buy it. That's it.
#18 nonamesleft
Feeb wrote:
Never use credit. Try your best to save and buy and do not owe. Even your car etc. Your credit score is just a license to borrow more and get into trouble. You don’t really need it- unless you want to owe. I was telling someone this when I saw a furniture store that said 0 down for a long time. I said that if you can't afford the piece of furniture right now, then you don't buy it. That's it.
7-Dec-23 9:13pm
#19 Feeb
It’s hard to not get roped into the credit grind when you’re young- but teach your kids that this isn’t the way. Earn, save, buy. Don’t borrow, owe and buy multiple times.
#19 Feeb
It’s hard to not get roped into the credit grind when you’re young- but teach your kids that this isn’t the way. Earn, save, buy. Don’t borrow, owe and buy multiple times.
8-Dec-23 8:28am
#20 John
Feeb wrote:
Never use credit. Try your best to save and buy and do not owe. Even your car etc.
I agree with this in general -- not using credit to buy things -- but for people who can do that, using a credit CARD can be an incredible benefit.
Your credit score is just a license to borrow more and get into trouble. You don’t really need it- unless you want to owe.
Well, I would maintain that if people want to own a home, then most will be unable to do that without credit. And, mortgage rates are absolutely affected by credit scores. So, I disagree with this part.
You really can have the best of both worlds. You don't need to carry a balance and pay interest to establish a very high credit score.
So, again, combine the two things:
1. Always have the money before you buy things (with the exception of a house).
2. Use credit cards that you pay off immediately.
If you can actually stick to that, you'll end up in a good financial position, have a good credit score when it comes time to need a mortgage, and likely can get lots of credit card benefits along the way.
#20 John
Feeb wrote:
Never use credit. Try your best to save and buy and do not owe. Even your car etc.
I agree with this in general -- not using credit to buy things -- but for people who can do that, using a credit CARD can be an incredible benefit.
Your credit score is just a license to borrow more and get into trouble. You don’t really need it- unless you want to owe.
Well, I would maintain that if people want to own a home, then most will be unable to do that without credit. And, mortgage rates are absolutely affected by credit scores. So, I disagree with this part.
You really can have the best of both worlds. You don't need to carry a balance and pay interest to establish a very high credit score.
So, again, combine the two things:
1. Always have the money before you buy things (with the exception of a house).
2. Use credit cards that you pay off immediately.
If you can actually stick to that, you'll end up in a good financial position, have a good credit score when it comes time to need a mortgage, and likely can get lots of credit card benefits along the way.
8-Dec-23 8:31am
#21 Porksta
You all should look into Buy Now, Pay Later. No interest, just make three payments after your initial down payment and you are all set!
#21 Porksta
You all should look into Buy Now, Pay Later. No interest, just make three payments after your initial down payment and you are all set!
Don't ever miss a minimum credit card payment