What Happens After a Missed Credit Card Payment?

Miss a credit card payment by a day or two and you’ll usually see a late fee and possibly interest on new purchases, but nothing on your credit report yet. Card issuers generally don’t report a payment as late to the credit bureaus until it’s 30 days past due. The longer it goes unpaid after that, the more it costs and the harder it is to undo.

The first few days

Check whether the payment actually missed the deadline. Issuers judge lateness by when the payment arrives, not when you sent it, and many have a cutoff time on the due date. A transfer you started from another bank on the due date might land the next day. If the due date fell on a weekend or holiday when the issuer doesn’t accept mail, a payment received the next business day isn’t late.

If you did miss it, pay at least the minimum right away and then call. Ask whether they’ll waive the late fee. They don’t have to, but issuers often do for a first slip on an account that’s otherwise been paid on time. The fee can’t be higher than the minimum payment that was due, and your card agreement lists the exact amount.

You may also lose your grace period. If you normally pay in full, a missed or partial payment can mean new purchases start collecting interest right away. How Credit Card Grace Periods Work explains how to get it back.

At 30 days

Once a payment is a full billing cycle behind, the issuer can report it to the credit bureaus as 30 days late. That’s the point where real damage begins. Payment history is the single biggest factor in FICO scores, and a fresh late payment can knock a good score down noticeably. A late payment stays on your credit report for seven years from the date it happened, although its effect fades over time.

If you can bring the account current before the 30-day mark, do it. That’s the most valuable deadline in this whole process.

At 60 days and beyond

When a payment is more than 60 days late, the issuer can raise your interest rate to a penalty rate on your existing balance, not just new purchases. Penalty rates are listed in your card agreement and can be close to 30%. Federal rules require the issuer to review the increase and restore the earlier rate after six months of on-time payments.

Keep missing payments and the account will typically be reported 90, 120 and 150 days late. Around 180 days, most issuers charge off the account, writing it off as a loss. You still owe the money; it’s often passed to a collector or sold. At that point, How to Respond to a Debt Validation Notice becomes the next thing to read.

What to do today

1. Log in or call and confirm exactly how much is past due and what it would take to bring the account current.
2. Pay what you can now. Even a partial payment shrinks what you owe.
3. If you can’t cover the minimum, say so and ask about hardship options. What to Ask for When You Can’t Make a Card Payment has the questions.
4. Set up autopay for at least the minimum so a busy month doesn’t cause the next one.
5. Stop using the card until you’re caught up, so the balance doesn’t grow while you’re working on it.

If an accurate late payment already appears on your report, you can write to the issuer and ask for a “goodwill adjustment,” especially if it was a one-time slip with a reasonable explanation. Some say yes; many don’t. If the late mark is wrong, dispute it; see How to Dispute a Credit Report Error. Understanding Credit Score explains why payment history carries so much weight.

Sources

• CFPB: When is my credit card payment considered late?
• OCC HelpWithMyBank: Can the bank charge a late fee on my credit card?
• Experian: When do late payments get reported?
• Experian: How long can negative items stay on your credit report?

This article is for educational purposes and is not financial advice.