• Darby Franklin

How late fees can end up costing you more than $15

Have you ever been slack on a credit card payments? After the initial pain of throwing away $15 for the late payment fee - you can end up suffering a lot more pain down the track.

One late payment on its own is not enough to ruin your chance of getting a loan – if you repay it and make your repayments on time from that point on. But a number of late payments on your credit report is a sign of significant financial stress or just plain bad money management skills, so it may make lenders reluctant to approve you for a home loan in the future.

It’s not just late payments on your credit card that matter, either. Dishonours for direct debits can also be viewed as a sign of poor money management.

But I can just go to another bank, right? Wrong! With the introduction of comprehensive credit reporting, your credit assessor will be able to see your credit conduct across all lenders.

This tightening in lender criteria has meant that there has been less flexibility allowed for those that have suffered a blip in their credit history. It’s important to get back on track as soon as possible and build up a history to demonstrate that it was just a blip!

Most banks now allow you to set up SMS reminders sent if you have failed to make the repayment amount by the week before the due date. Better yet - set yourself up with direct deposits so you know how much is coming out of your account (and when) so you can ensure there’s always enough to cover your bills.

Does a late credit card payment affect my balance transfer?

Yes. If you have a balance transfer, making a late payment can result in the termination of the promotional balance transfer offer. So you lose out on the 0% interest rate that attracted you to the balance transfer in the first place. Instead being replaced by a stunningly high interest rate (ouch!)

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