During difficult economic times, you cut parts of your budget to afford the necessities. Often, you don’t pay off credit card bills because that is the first thing to set aside.
It may seem like a good idea to push aside your obligations to pay off credit card bills, but there are some serious ramifications that can come from this behavior. It is important for you to understand the risks of not paying off credit card debt. Or in other words, have a look at the 5 good reasons to pay off your bills.
5 Good Reasons to Pay Off Credit Card Bills
1. Late Fees. Credit card companies are notorious for tacking on late fees when a payment is even just a few days late. These fees can be anywhere from $25 to $50. Some are even higher. On top of your payment and the balance that you owe you can incur this fee.
2. Collection Calls and Legal Action. Failure to pay off your credit card bills will result in collection calls and could ultimately lead to legal action. These bill collectors can legally call you anytime between 8 am and 9 pm, seven days a week. If you don’t pay, the credit card companies can take legal action against you. This can land you in court and on top of your original balance and late fees; you could also find yourself paying court costs and attorney fees.
3. Higher Interest Rates. Just one missed payment can result in your interest rates being increased. You can wind up paying much, much more over the principle due to higher APR. The thing is, this practice is legal! If you are late just one time, you could find yourself paying.
4. Bad Credit Score. Of course, you know that not paying your bills could result in a bad credit score. This can hinder you in many ways. A bad credit score can keep you from purchasing a house or car, or from getting more credit.
5. Inability to do Certain Things. Do you want that management job? Do you want to work in a federal agency where you must have a security clearance? Do you want to rent an apartment? Your failure to pay your credit card bills can keep you from doing any of these. Many companies run a credit check on their prospective employees to decide how trustworthy they are and whether they will be dependable.
Security clearances for certain federal agencies need credit checks. While they don’t look at your credit score, they do look hard at slow payments and failure to pay bills –- and they don’t look at it favorably.
Apartment complexes and even private landlords run credit checks as part of the application process. If your credit report shows that you don’t show your credit card bills, it could cause you to lose out on a nice apartment or condo.
Now that you want to pay off credit card bills because it is just the right thing to do. However, if you need some extra incentive, these reasons should make it very easy to decide to pay your bills.
Learn more about credit card debt management so you know what options are available for your situation.