With a credit card, it is quite possible to get a tool that helps you with your finances, however not making the payments on time can cause a headache for you. No matter if it’s Amex or any other card, late payments will not only affect your monthly statement. You may find yourself facing penalties, an increase in interest, and credit score problems that can last for a while. We can look deeper into the consequences.
Late Payment Fees
Most issuers will usually levy a late fee on you in case you do not pay a minimum amount by the due date. For several cards including American Express, this amount can go up to $40. Overtime, these fees become significant if you miss your payments often.
Higher Interest Charges
Once your account carries over a balance that is past due, interest is added to your account. Even if it is only for a few days that you missed, you can lose your grace period, meaning that for future purchases interest will be charged immediately without waiting for the grace period.
Credit Score Damage
Once a payment is 30 days late, issuers of the card start reporting it to credit bureaus. The negative mark can be on your credit report for a period of seven years. Since making payment on time is the biggest factor in the credit score, one late payment can significantly make your score go down.
Loss of Rewards and Benefits
There are some cards such as the premium issuers like Amex, that may suspend your rewards or benefits if your account becomes non-performing. That is to say, you might lose the accumulation of points, cash back, or travel benefits that have supplied you.
Possible Account Restrictions
If you continue to be late with your payments, the credit card company can not only lower your credit limit, but also raise your interest rate, and even close your account. This, in turn, impacts your finances today and your borrowing possibilities for later on as well.