Credit Card Guide

What Is Delinquency Assessment?

25 January 2013 by CreditCardsCo™

A "delinquency assessment" is just a fancy term for a "late payment fee." Credit card companies charge them when you either send your payment in late or miss your payment all together. There is usually a specified amount of time that must pass, a grace period, before this charge is added to your balance.

When you miss a payment on your credit card, or your payment is received extremely late, your account may undergo a "delinquency assessment." This is basically a late payment service charge that is added to your account after a grace period passes. The grace period and the fee itself vary between credit card companies.

Responsibility is very important when you have a credit card. You need to be accountable to paying the bill every month not simply because it is part of the contract but because there are several fees and penalties you could pay.

Credit cards are, first and foremost, a business. This is something that is very important to remember when you are considering which card you feel is best for you. Regardless of interest rates, convenience factors, and other features, it is very important to remember that these are companies that are trying to make a profit. A good credit card company offers competitive rates and other attractive benefits at a reasonable price.

Your Responsibility

As a responsible credit user, it is important for you to remember that you have a responsibility to use your credit card in a reasonable way and to make your payments on time. If you do not, you could end up paying a fee and eventually start to lose some of your privileges. Missing a payment can result in:

  • Late payment or missed payment charge
  • Additional finance charges
  • Default APR

Your Credit Card Company's Responsibility

Unfortunately, your credit card company does not have to be responsible for your behavior. They provide a service to you and trust that you will make your payments. Most people are able to do so without any problems and continue to have a great relationship with their credit card company. If you miss a payment, however, your account might undergo a "delinquency assessment," which is basically a determination that results in a late or missed payment fee. Further extension of this assessment can and usually does result in more charges.

It is important to remember that these fees and charges are part of the credit card company's plan to provide the highest quality of service possible. By issuing fees, the goal is to minimize delinquency so that services to all customers can continue. In theory, this should prevent the inconveniencing of good customers who rely on the benefits of their credit cards.

An Example Of Delinquency Assessment

When you miss a payment, credit companies often give you a grace period within which you can still make your payment before they sense that there is trouble brewing. Sometimes payments are lost in the mail; sometimes online payments don't process properly; and sometimes you simply forget, and while it is still your responsibility these excuses are somewhat understandable and often forgivable. However, after a period of, say, 60 days, it's probably safe to assume that you missed the payment. At this time, your credit card company will probably slightly increase your interest rate and charge you a late fee.

Obviously, you want to avoid the "delinquency assessment" at all costs. Not only will it end up costing you more money, but it will eventually begin to affect your credit overall. This could result in losing your accounts as well as the ability to get more credit.

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