What happens if you pay less than the minimum on your credit card?
Paying something toward your credit card bill may seem better than doing nothing, but it comes with consequences.
If you owe less than the minimum amount due on your credit card, making a partial payment will not be considered a timely payment. This is because credit card payments are categorized as late if they don't meet the minimum requirement by the due date. Consequently, your issuer may charge you a late fee and continue accruing interest on the outstanding balance.
Additionally, if the delinquency persists for a period of 30 days or more, your credit card issuer may report the missed payment to the credit bureaus, negatively impacting your credit score. If you're regularly unable to meet the minimum payment, it is advisable to reach out to your credit card company as soon as possible. They may offer hardship programs that can help you lower your interest rate or monthly payment, providing temporary relief.
If the issue persists across multiple credit cards or is a long-term concern, you may want to consider debt consolidation loans, debt management plans, or even debt settlement as viable options to alleviate your financial burden.
Written by urgent.news from CBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.