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Survey looks at reasons for missed credit card payments

On Behalf of | Aug 31, 2018 | Chapter 13 Bankruptcy |

Some people in Virginia may be among the growing number of Americans who are delinquent on their credit cards. The delinquency rate has risen from 2.42 percent at the start of 2017 to 2.47 percent. Delinquency means the credit card payment is at least 30 days past due.

NerdWallet, a personal finance service, surveyed more than 2,000 people and found that around two-thirds did not have the funds to pay their credit card bills while about one-third said they forgot. Given the opportunity to select more than one reason, 29 percent of people said they did not pay because of a lack of income or unemployment while one-quarter said they made paying off other kinds of debt a priority. Studies have shown that people tend to pay mortgage or rent, student loans and car payments before they pay their credit cards.

There are a number of consequences for falling behind on credit card debt. First, balances incur interest. A late payment may also generate a late fee. In addition, a consumer who falls further behind may face a higher APR. The so-called “penalty APR” could rise as high as 29.99 percent and remain there for six months or longer. Missing payment can also hurt a person’s credit score. With a poor credit score, a person could struggle to buy a car or a home or even rent an apartment.

An individual struggling with debt may want to talk to an attorney about the option of filing for bankruptcy. Someone who has a regular income might be eligible for a Chapter 13 bankruptcy, which allows certain assets to be kept. Filing for bankruptcy automatically puts a stop to any creditor actions, including foreclosure on a home.