Making just the minimum payment on a high interest, high balance credit card can put the debtor in a bind. When paying the minimum, most of the payment will go toward interest, not principal, which will cause the balance to remain stagnant.
As a result of being late on a credit card payment, creditors can charge a late fee, as well as increase one's interest rate. When someone is over 30 days late on a credit card, the credit bureaus are notified, and this may remain on the credit report for a period of seven years.
Having a balance on a credit card greater than 30% of your credit limit can have a negative impact on your credit score. When dealing with a maxed-out card, stop using the card, and do your best to pay the balance in full as quickly as possible to avoid a drop in your credit score.
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