Credit Card Reward Points Held Hostage
Making a late payment on your credit card has always been a costly mistake. Not only will you get charged a large late payment fee, your credit card interest rate is sure to instantly soar to the highest rate possible. The advent of universal default means that not only the card you missed the payment on, but also any other credit cards you hold will likely see their interest rates increased to the maximum. The late payment in your credit report will make getting loans more costly. If that were not enough, credit cards with awards are now starting to hold the reward points you earned hostage when a late payment is made.
Charge cards such as American Express and Diner's Club which don't usually carry interest charges are leading the way in this newest twist. As with most credit cards, late payment with either will get you sky high interest rates and a past due fee. In addition, both will hold the reward points you've earned hostage unless you pay a reinstatement fee. If you don't pay the reinstatement fee which can be as much as $15, you won't be able to use any of your points. Worse, if you don't bring your account into good standing within a 30 day period, there is a good chance that your card account will be cancelled and you will lose all the points you have accumulated.
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