A report by NerdWallet showed that about 37% of Americans have been charged a late fee on a bill in the last 12 months!
Many American consumers are struggling financially and a recent report by NerdWallet is proof to that! According to it, 37% of Americans have faced a late fee on their bills over the past year. 2,061 U.S. adults were surveyed in early April and the results revealed that credit card late fees – the most common one – affected 21% of them, while utility bills and rent late fees charges hit, respectively, 10% and 8% of them.
“Late fees are just one consequence of making late payments”, said Sara Rathner, a travel and credit cards expert at NerdWallet.
While a missed payment on a credit card or loan can immediately incur a late fee, it usually doesn’t impact your credit report until you’re 30 days late, according to Matt Schulz, chief credit analyst at LendingTree. However, being 30 days or more behind can lead to more severe consequences, like utility shutoffs or even car repossession. “If you know that you’re going through a financial rough time, it’s definitely better to tackle it head-on and not wait,” Schulz added.
If you’re falling behind on your monthly payments or see yourself potentially doing so, Greg McBride, chief financial analyst at Bankrate.com, suggests contacting your creditors early. “That’s when you have the most options. The further behind you get, the fewer options exist,” he said. Early communication can provide you a chance to explain your situation and negotiate a resolution.
“Whenever you can go into one of these situations and offer up a solution… that can go a long way to making the conversation go a lot more smoothly,” Schulz said.
What Can I Do?
- Ask to Waive a Late Fee: you can ask to have your late fee waived, but, keep in mind that, frequent late payments reduce the likelihood of getting another one;
- Enroll in Hardship Programs: consider this if you find yourself in a situation that is making it difficult to keep up with payments. These programs, offered by many lenders, can temporarily reduce interest rates and waive fees;
- Ask About Cleaning Up Your Credit Report: a single late payment can significantly impact your credit score, potentially lowering it by up to 100 points. If you made a one-time mistake, you can request that the late payment be removed from your credit report, although lenders are often reluctant to do this as it can make credit data unreliable.