Credit cards are great tools to have if you’re able to use them wisely. Unfortunately, many people get caught in situations where they’ve overspent and cannot pay off their balances in full.
If you have multiple credit cards and are worried you won’t be able to make payments on all of them, consider using a debt consolidation calculator, as it can help you find a way to streamline multiple payments into one.
Not paying your debt can have dire consequences, so do this first. What are those dire consequences? It depends on your cardholder agreement, but in most cases, this is what will happen:
Interest on outstanding balances will compound until the balance is paid off in full. So, if your balance increased last month due to an interest charge, you’ll now pay interest on top of the old balance plus the interest.
Your cardholder agreement will let you know if there are any penalties for late or missed payments. Typically the charge is anywhere from $29 – $59 and is subject to interest if not paid off before the next statement closing date.
The longer your payments remain late, the lower your credit score will fall and the harder it will be for you to get access to new credit cards, loans, or credit increases.