Many people are late on their credit-card payments because they simply don’t have the cash. But an even more shocking number don’t pay because they, well, forget.
Some 448 of respondents in a survey of 2,000 people released Tuesday by personal-finance company NerdWallet said they had made a delinquent payment on their debt, meaning the debt was 30 or more days overdue.
Of those that were delinquent, 35% said they paid late because they forgot to pay their bill. Another 33% said they paid late because they needed the money to pay for essentials. And 32% said it was because they had an unexpected emergency.
Delinquent debts add up. Nearly 2.5% of credit-card debt from commercial banks has become delinquent in 2018, down from 6.8% in 2009 at the height of the Great Recession, according to the St. Louis Federal Reserve.
That adds up to $23 billion in overdue credit-card debt, personal-finance site NerdWallet found. About one in five Americans has made a delinquent credit-card payment, it added. If each one paid $27, the maximum late payment fee by law, that would total $1.4 billion in fees, excluding interest.
The fact that so many people are forgetting to pay their bills is surprising, said Kimberly Palmer, a credit-card expert at NerdWallet. “In a way it’s good news because it’s a pretty easy thing to remedy,” she said.
One way is to set up reminders from your bank or credit-card company, which can send texts or email notifications when your bill is due, she said. Depending on your bank, you may also be able to make automatic payments.