Paying less than minimum on credit card and 30 day late : Bad Credit Advisor

Paying less than minimum on credit card and 30 day late

If I pay less than the monthly minimum payment by the due date, will it be reported as 30 days late on my credit report? Citibank has just raised minimum monthly payment to 4 percent from 2, and to say it is getting tough will be an understatement. Or Capital One or Home Depot or American Express. With credit cards getting tough, I am now receiving those emails daily. Yes comrades, paying less than minimum on credit card will result in 30 day late going to your credit report. That is why it is called minimum, which is in plain English is the least you must do. You can try, however, contact your credit cards and ask for a break. Do it the earliest you sense you can not come up with, do not wait till the last day. It works more often than not. And often, just a phone call will do, but write a letter, sample of which you find in the end, if necessary.

Clearly, you must understand how minimum payment is calculated. It is basically very simple. Normally set at 2 percent of the monthly balance plus monthly interest, credit card minimum payments can go as high as 4 percent, which was part of the earlier effort to reduce consumer debt and subsequent minimum payment hike. So if your monthly balance with interest was for example $2,000, you have to pay anywhere from $40 to $80. Needless to say that paying only minimum payment each month will take forever to pay balance off.

Here is the letter to request credit company to refrain from reporting you to credit bureaus with a 30 day late delinquency when paying less than minimum payment. Always follow up with the phone call after four to five days. Once you see next credit card bill, think right away if you can afford it.

Date {MM/DD/YYYY}

Your name
Your address
Phone/fax/email

Customer service
Credit card address
Re: {credit card account number}

Dear Sir or Madam,

I am writing to inform you in advance that I will not be able to make next minimum payment due to unexpected financial emergency, e.g. medical bills, loss of job, emergency home repair, etc. I also request that you do not report my credit account as delinquent. I am well aware of the fact that not meeting the minimum obligations results in such a reporting. However, please take into consideration the above reason, and the fact that I will bring my credit card account current by the due date that follows. Thank you for your consideration and I hope for a favorable response.

Your signature
Your printed name

If you get a positive response, you better make sure that you have enough money to make up that minimum payment and cover another one by the due date that follows the one you are about to miss. Alternatively, you may ask your credit cards to workout some sort of payment plan if you feel that paying less than minimum payment may become a necessary habit. Such plans often are hard to keep from being reported. Previously, 30 day late payment affects credit score.

Fri Oct 9, 2009 08:10PM by Tony | More in Credit Bureaus | Comments (0)

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