All debts become delinquent or overdue the day after a
payment is not made. Many lenders offer grace periods that may
range from 5 days to as many as 30 days. However, these grace periods DO NOT
not mean the debt is not delinquent or overdue, it simple means the lender has
agreed to wait a certain number of days before taking any action.
Check the fine print! Most credit contracts
that include grace periods continue to charge interest during the grace period
and, in many cases, at the highest interest rate allowed by law. Quite often
lenders will use your use of the grace period as an excuse to raise your
interest rate. Keep in mind that many lenders will charge an additional
fee (usually called a late fee) and that your payment is applied toward the
late fee first, then toward the outstanding or unpaid interest, then toward the
current interest and finally (if there is anything left) toward the outstanding
balance.
In most cases, the delinquent date and the date the statute of
limitations to collect the debt begin running are the same day. This is also
the date that should be reported to credit reporting agencies and credit
bureaus.