Most everyone knows that it is not a good idea to pay your credit card bills late. In spite of that, the town of Put-in-Bay, OH, continues the practice of paying late every month, according to the TownMessenger. Because of it, one of its two credit cards has been temporarily deactivated.

Like everyone else, the town has also had to pay late fees for the regularly late payments. It has two credit cards, a Visa and a MasterCard. These have added to the town’s expenses to the tune of an additional $180.

The reason for its repeated late payments, however, is not because of either overlooking it or a lack of money when needed to pay it. Instead, it is because everything that goes onto the credit card bills has to be approved by the city council before any bills are paid. Unfortunately, the process is not synchronized to take advantage of paying its bills on time. This is in spite of the fact that the bills arrive three weeks before they are actually due.

The town has now been late in eleven out of twelve months in 2009. Three times in the year, the bill was allowed to become two payments past due.

Apart from paying the few late fees, however, there really are not any other adverse costs – yet. The bills are generally paid in full once the council approves them. This has helped them.

Recently, however, there has been some concern about how it might affect their credit rating and interest rates. The town had been paying 12.5% in interest. They were actually able to get the credit card company to lower this rate to 12% in January of 2009, apparently in spite of the late payments.

The town council is not too concerned about its credit score – at least not yet – because it also has other credit, which it always pays on time. This includes its loan payments, bond rating, and more. Interestingly, it seems that the regular on-time payments of the other bills have offset the harmful effects of the late payments – so far.

A main concern of some of the city council of Put-in-Bay is whether or not it will ultimately affect its credit score and interest rate. For most people with consistently late payments, there is a strong increase in interest rates, late fees, and it does hurt their credit score.

FICO, the company that created the credit report, says that continually being late with payments will affect a credit score more than just about anything else except a bankruptcy. It will lower a good credit score and hurt the ability of the card’s owner to be able to get good terms on new credit. If that happens with Put-in-Bay’s credit cards, then they will certainly start paying a lot more each month.

The town council is hoping to get the credit card companies involved to move the due date to coincide with the town’s meetings. If that happens, then it will certainly help the town to save some money. Otherwise, they will have to keep on paying the interest and late fees – and may get an interest rate hike sooner or later.

One thing that may indicate that trouble is on the way is the fact that one credit card has already been put on hold as far as adding any new charges to it goes. Generally, when that happens, it is reported to the credit bureaus, and the credit score is changed for the worse.