Having a credit card comes with the responsibility of paying it off to the best of your ability each month. At least making the minimum required monthly repayments.

However, most of us have, at some time, forgotten or been unable to pay that amount.

Sometimes this is because our money has had to be diverted somewhere else, possibly in an emergency and sometimes it's just plain absent-mindedness.

If you are missing payments because of a change in your circumstances, like you have lost your job and can't afford payments at the moment, you might be able to claim financial hardship. Talk to a free government funded financial counsellor about this on 1800 007 007.

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Late payments can have serious consequences

Depending on how late your payment is, how big it should have been and your track record with the lender, the immediate results can range from a reminder call or letter to a late fee to a block on the card and a black mark on your credit file.

If you suddenly realise you've missed a payment, pay it immediately and call up your lender to explain the delay. If you've been sick, or overseas, the lender may waive the late fee.

Late fees

You may well be charged a late fee for late credit card payments. This fee can range from $9 to $35 or more and it's applied to your next due payment. While $9 might not be much, it's money that you could be paying off your principal with. Any late repayments can also be listed on your credit report.

The details will be added to your credit history

If your payment is more than 14 days overdue, you'll probably get a negative note on your file and this could damage your credit rating for at least two years. In turn, this could make it harder to get loans at good interest rates.

You may be charged extra interest

When you have a late payment, you'll be charged interest for all your transactions during the statement period. You may also be charged interest for the late fees that are applied before you pay them.

You'll lose your interest-free period

Your interest-free period on new purchases is contingent on your paying the balance in full and on time in each statement period. Late payments mean no more interest-free days until you've paid on time for at least two consecutive months.

You may lose any rewards or points that you're earning

Most credit card providers have the right to freeze or even wipe out your reward programme earnings or privileges if you're significantly late with a payment. Some lenders will unenroll you if you're several weeks late.

You may get a default

If your payment is more than 60 days late and the outstanding amount is more than $150, then you can be classed as being in default. Defaults are very bad for your credit rating and can linger for five years or more, so if you're really having problems, it's time to talk to your lender to work out a solution or a financial counsellor.

You may be contacted by debt collectors

Leaving a payment outstanding for more than 60 days means your lender can pass on your debt to a collection agency. Debt collection agencies can be a lot stricter than your credit card issuer, so if you can avoid it, don't let it get to this stage.

None of these things happen overnight, however, so if you talk to your lender as soon as, and preferably before, you get into difficulties, you can find a solution and prevent the very worst consequences.

If you realise that you'll be late with your payment

The first thing to do is to stay calm and work out how much you can afford to pay. Then follow these steps:

Call your lender

Do this as soon as possible so that you have more time to sort things out. If you have -good-- reasons for being late and you can pay something, then your lender will be happier to work with you.

Ask for a due date extension

If you know that you'll have the money ready in, say, two or three weeks, then you could ask your lender for an extension. Doing this before you're late makes it more likely that your lender will look on the request favourably. Asking for an extension can help you to avoid late fees and negative listings.

Talk about a hardship variation

If your lateness is down to a situation that could be ongoing-illness, redundancy or similar-then you can ask your lender to vary your terms because of hardship. This can mean freezing the account for a set period of time, making lower minimum payments or setting up another sort of payment plan. This is a legal agreement and while it takes the pressure off you at a difficult time, you must abide by the new terms.

Help yourself by paying your bill on time

If you're simply absent-minded, then it's a shame to be penalised for it, especially if you actually have the funds but you just forget to send them on their way! Set an alert on your physical calendar, on your phone and your laptop, ideally several days before the due date, so there's less chance of you forgetting.

You could automate your payments if you're always confident that the funds are there. You can decide either to set a debit for the minimum amount to come out, or a fixed amount each month-as long as it's more than the minimum repayment.

Pay off your card in total if you can. If you're planning to travel or there's other things about to go on in your life that could be a distraction, then clearing your balance is the best possible way to avoid a late payment.

Make several small payments during the month so that the -final-- payment before the due date is smaller and less intimidating. Set up the account details you'll need to make bank transfers and then, well, make them. Just make sure that you transfer more than the minimum due each month to be on the safe side. An added benefit of this approach is to reduce your interest, because your interest is calculated daily and if your balance diminishes throughout the month, your due amounts will be smaller.

Compare credit cards from Australia's major banks, credit unions and other credit card issuers here.

The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. If you or someone you know is in financial stress, contact the National Debt Helpline on 1800 007 007.