What are the consequences of missing a credit card or loan payment?

Missing a credit card or loan payment can have several consequences:

1. Late fees: Most lenders charge a late fee if you miss a payment or pay it after the due date. Late fees can add up over time and increase the amount you owe.

2. Interest charges: When you miss a payment, interest charges continue to accrue on the balance owed, and interest is charged on the late fee as well. The longer you go without paying, the more interest you will owe.

3. Damage to your credit score: Payment history is the most significant factor in determining your credit score. Late payments can stay on your credit report for up to seven years and can lower your credit score. A lower credit score can make it harder to get approved for credit in the future, and if you are approved, you may receive a higher interest rate.

4. Collection calls and letters: If you miss multiple payments, your lender may send your account to collections. Once your account is in collections, you may receive calls and letters from collection agencies, which can be stressful and disruptive.

5. Legal action: In extreme cases, lenders may take legal action to collect the debt owed, such as a lawsuit or wage garnishment.

It's essential to pay your bills on time and in full each month to avoid these consequences and maintain a good credit score.