Generally, the credit card issuer indicates the monthly payment due date on which the cardholder is supposed to make the payment. The payment should include both the principal and interest on the debt, and the payment should be made in full. In the event of non-payment or late payment, the credit card issuer may charge a late fee.
According to the credit card agreement, the cardholder can use the funds until a certain threshold, which is called a credit line, is reached. Borrowed funds must be returned in the total amount, together with interest on the principal, which is also stipulated in the contract. As a rule, payments are made monthly, in compliance with the payment due date. The law specifies that as a general rule, payment must be received by 5 pm on the day of payment.
If the debt is not paid at all or is not paid on time, the basic penalty is the late fee imposed by the issuer. The amount of the late fee depends on the regulations set by the issuer with respect to the specific credit card and on past delays. If the delay lasts 60 days or more, the creditor has the right to increase the interest rate to the penalty rate, which will make the conditions of the refund extremely disadvantageous. Also, if the issuer provides reward points for prompt monthly payments, the cardholder loses these points in case of default or delinquency. Besides, this information may be included in a credit report that is reviewed by employers and may also affect the credit score, which determines the potential terms of future credit.