Credit Card Guide

What Is Past Due?

14 December 2012 by CreditCardsCo™

In terms of credit cards, you may occasionally see the words "past due" or "past due amount" on your statement. This means that the credit card company has not received a payment for your previous statement. It is both an indication for you to check on any pending activity but also that fees could be assessed soon.

If the words "past due" appear on your credit statement, it is not necessarily something you should worry about. They are there merely as an indication that either you missed your payment or your payment has not been received. However, you should be wary that if they do not receive payment, fees will be charged.

Credit cards can be confusing, but not simply because the terminology may seem foreign. Part of the reason credit card contracts are confusing is because of the way that credit cards actually work. You might think that "past due," for example, means something "bad," but in reality it doesn't.

When you see the words "past due" on your credit card statement, it does not necessarily mean that you are in trouble. This is simply something that lets you know that you missed your previous payment. This may be through no fault of your own, but it is important to know because it helps you to keep track of your finances better.

Reasons For Missing A Payment

This is the reason why many credit card companies give you a grace period before they begin to assess serious fees to your credit card. There are a number of reasons why your payment may not have been received:

  • It was lost in the mail
  • The online transaction did not complete
  • You forgot
  • Your check didn't clear or was denied

Obviously, missing a payment does not mean that you are trying to avoid paying your bills. This is why the grace period and the "past due" notice are on your account: they help you to keep track of your finances.

Grace Period

For many credit card companies, the grace period for making a payment can be up to 60 days after the due date. This may seem contradictory to purpose of having a due date, but the reality is that your payment due date is part of a design that helps to regulate your account, so that your interest accrues fairly, for example. When you miss a payment it is possible that you may be assessed a fee of some kind, but that is up to the credit card company. In fact, many companies will work with you if you contact them once you realize that you have missed the due date. Communication is always recommended, especially when you are not at fault.

Your Statement

While the "past due" amount on your credit card statement may not be the cause of any penalties right away, it is still important to remember that you are being charged interest or finance charges on the full balance of your account until your payments are processed. Obviously, this is not at a great penalty to you, but if you have a solid plan for reducing your credit card balances or are trying to make a concerted effort to master your finances, the extra interest could hurt you in little ways. It's not a big deal, but it's something to think about.

Final Word

Missing one credit card payment is not a big deal. In fact, it happens all the time. However, when you see the "past due" amount notice on your statement, make sure that you take care of it as soon as you can to avoid penalties.

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Credit Card FAQ

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