Even though you keep making your monthly payments on time, maintaining credit card debt can adversely affect your financial situation. Simply making the minimum required payment means you’re not paying down any debt as you accumulate more debt in the form of interest. Additionally, having more debt than available credit will negatively impact your ability to qualify for mortgages, auto loans, and other types of financing. At some point, you’ll also run the risk of falling behind on your payments, and that’s when the adverse consequences really start to pile up.

Late Fees and Interest Will Add Up
As soon as you miss your first credit card payment, you’ll be faced with late fees and higher interest charges. These charges will add up faster, increasing the debt you owe. Even if you can get back on track with your creditors, the additional fees and penalties will raise your debt quickly. You’ll be required to pay more in minimum monthly payments, making it harder for you to pay down your debt.

Your Credit Score Will Drop
If you fall far behind, it won’t be long before your late payments result in negative hits on your credit score. When combined with maintaining a high amount of credit card debt, late payments can result in a significantly lower credit score. As a result, you’ll have to work harder to rebuild your credit after you repay your debt.

Your Account Will Be Sent to Collections
After several months of late or missed payments, your accounts may be closed. In that case, your debts will be referred to collections agencies, and your history of delinquent payments will show up on your credit report. This means you won’t have any credit available to you, and you may not be able to get another credit card for the foreseeable future. At this point, you may need to seek professional help to recover from your financial situation.

If you do have mounting debt, it’s better to do something about it sooner. If you can’t start paying off your debt a little at a time, there are other options available to you. Try arranging a repayment plan with each creditor. Alternatively, you can contact a credit counseling firm or a bankruptcy attorney. The key is to address your debt problems before they become worse.