Never miss a credit card payment or you will count the cost

February 7, 2007

New figures show that by missing just one single payment on a 0% balance transfer credit card could cost as much as £278.

Omitting a payment could incur increased interest charges in addition to losing a card’s introductory benefits and possibly damaging one’s own credit file. This advice is offered by comparison site Moneysupermarket.com, whose head of credit cards highlights the lack of awareness on the customers’ part as to the extent and severity of penalties incurred through missing a single payment.

There are currently 31 cards which automatically revert back to the typical APR after one single missed repayment, which could prove very costly for the credit card holder.

According to Moneysupermarket’s figures, 62% of 0% balance transfer credit cards automatically revert back to their typical APR if one single payment is missed.

Based on the average amount put onto a balance transfer credit card, it is estimated that is where the £278 figure in charges comes from.

Despite the physical amount of extra money a missed payment could cost a customer, they also run the risk of damaging their credit profile which could affect anything they apply for in the future ranging from everyday objects to a mortgage at some point in the future. It could affect whether they will be accepted onto various firms’ financial plans, and if they are, it is perfectly plausible that they may not be offered the best rate available if their credit profile is not as good as it could be.

Moneysupermarket’s experts recommend setting up a direct debit covering the minimum amount due to be repaid monthly, so that there is never any question of a missed or forgotten payment. In addition to this, they recommend making additional payments whenever one can to bring down the debt as quickly as possible.