Late payment penalties, additional interest and costs

The familiar cliché that ‘Time is Money’ is usually applied to business scenarios. For example, delays in completing a major construction project usually increase costs and penalties apply for missing deadlines. 

In the context of personal debt, the same principles apply. If you delay in making your monthly payments on your credit cards, you will find that it will cost you in terms of penalties and additional interest.

Timeliness also applies to dealing with personal debt problems. Many people who felt obliged to spend heavily at Christmas and liberally availed of their flexible friends now see the credit card statements coming through their letterboxes. It is tempting to delay making the contractual payments and let interest and penalties roll over for a month or two. Not a good idea. If you can pay, do it in time. If you cannot pay, you need to take advice on how to manage your finances and again the key is time.

The very minimum you should do is talk to your creditors yourself and work out and agree a re-payment plan with them. If this is too daunting, why not avail of a free initial consultation with one of the many firms in the debt management and personal insolvency business. If you do engage with one of these you will have fees to pay but the reputable firms will provide free advice to start with and spell out exactly how much ongoing assistance will cost and when you will be expected to pay them. Alternatively, you could speak to CAB, the CCCS or PayPlan and avail of their free advice services.

Paddy Byrne 07/01/2011