The Frugal Creditnista

If You Pay Less Than The Minimum Payment, It’s Still Considered A Passed Due Payment

Credit Myth: Paying less than the minimum balance on your credit cards will not count as a missed payment.

I got a client that felt if he paid ‘what he could afford' that was fine because at least he was paying something. This is an inaccurate belief.

Before using this method to pay any credit card bill you may want to review your terms of agreement. Typically there is a clause in there that if the minimum payment is not received in full it is still considered a late payment and subject to late payment fee. They'll still take your money, but it will include the interest you've accrued and that late fee as well. As you get your billing statements each month, you'll notice your ‘amount due' is growing instead of decreasing by the amount of payments you've made.

Its best to try to negotiate the payments down for an agreed upon time frame or permanently and get it in writing. Most cc companies have hardship programs that you may qualify for. In this case, two companies were very accommodating and the one was not. Fortunately the other two reduced his monthly amount so much that he was able to make the other cc minimum payment and have money left over to start paying extra on another high interest personal loan.

Hope this helps!

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