ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Credit cards are connected to bank accounts. When a payment with credit card is not successful, nothing is withdrawn from your bank account. Instead, your bank returns an error code-also called a decline code-which gives more information about the failed charge attempt.

Detailed explanation-2: -However, you will most likely still face late payment fees from your creditor. Once a late payment is at least 30 days late, the lender will typically report a missed payment to the credit bureaus, which has the potential to live on your credit report for up to seven years from the original delinquency date.

Detailed explanation-3: -The term late fee refers to a charge consumers pay when they fail to make a payment on a debt such as a loan or a credit card, or any other type of financial agreement such as an insurance or rental contract by the due date.