The true cost of missing a credit card payment

Just one missed credit card payment could mean a cost of £278, a loss of all introductory card benefits and potentially a damaged credit profile, according to new analysis.

Data from moneysupermarket.com reveals 62 per cent of credit cards offering a 0 per cent balance transfer introductory period will automatically revert back to a typical APR if just one payment is missed. This could cost card holders currently using a zero per cent balance transfer card who do not know the stringent terms and conditions on their card up to £278 in avoidable interest charges over the term of the introductory deal.

Rob Kenley, head of credit cars at moneysupermarket.com, said: “Those on a zero per cent balance transfer introductory period may not be aware of the severe penalties a single missed payment can result in. These credit card holders could be stung with unexpected interest payments if their credit card is one of the 31 cards that automatically revert back to the typical APR after defaulting on one repayment.

“People also need to be aware that failing to make a repayment could also have a negative effect on their credit profile. This could make obtaining credit for everything from mobile phone contracts to mortgages much harder. Additionally, when they are accepted for a financial product it is likely they will be offered a higher rate.

“To avoid missing any payments it is vital people set up a direct debit to repay the minimum sum required each month against their balance. They should also make additional payments whenever possible.”