What Is Likely To Happen If A Borrower Is Late On A Payment For A Credit Card Account?

This post seeks to proffer a solution to the question of what is likely to happen if a borrower is late on a payment for a credit card account? There are four possible answers that will be provided with only one being absolutely correct. This correct answer will be explained in a bit more detail in this article.

Question – What is likely to happen if a borrower is late on a payment for a credit card account? 

Without wasting too much time, the answer options for the question of – what is likely to happen if a borrower is late on a payment for a credit card account? are as follows:

A. The credit card issuing firm increases the credit card limit.

B. The issuing company immediately cancels the credit card once someone is late on a payment.

C. The credit card issuing firm will charge a late payment penalty rate which therefore raising the interest rate on the credit card.

D. The credit card issuing firm will demand that the credit card owner makes full payment of all outstanding bills.

The Answer to the question of what is likely to happen if a borrower is late on a payment for a credit card account?

The correct answer to the question of what is likely to happen if a borrower is late on a payment for a credit card account? is option “C”. 

Answer option “C” states that the credit card issuing firm will charge a late payment penalty rate which therefore raising the interest rate on the credit card. This is absolutely true as the credit card issuing firm will simply penalize the defaulting credit cardholder. He or she would be notified of the credit card company’s intention as well. 

In Conclusion

Failing to make bill payment as at when due will further increase the liability of the debtor. The credit card issuing firm will not cancel or demand an immediate settlement of the bills. The company would also not raise the credit limit.