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What happens if you miss a credit card payment?
As Americans’ interest rates and debt balances increase, they’re falling behind on credit card payments. Over the past year, about 8.9% of credit card balances have fallen into delinquency, according to Federal Reserve data, resulting from missed credit card payments.
While missing a payment can be detrimental to your budget and credit score, you can always take steps to minimize the impact. Here’s a look at some common effects for cardholders and what to do to avoid missing a payment.
What happens when you miss a payment?
Missing a credit card payment can leave a dent in your credit score, along with the following consequences.
Late fees
Your credit card payment is late after 5 p.m. on the payment due date (with some exceptions), according to the Consumer Financial Protection Bureau (CFPB). If you miss that cutoff, your issuer may charge a late fee.
The CFPB passed a rule in early 2024 limiting credit card late fees to just $8. However, the ruling is currently on hold, and it remains unclear when the regulation will go into effect. Current late fees can sometimes cost up to $40 and increase the more often you make late credit card payments.
If you can pay shortly after the due date, you may avoid the late payment fee altogether — especially if it’s your first late payment. Call your card issuer directly and ask whether waiving the fee is possible.
Penalty APR
You might also take on a penalty APR after a missed payment. If your credit card has a penalty APR, you’ll find it listed within your card’s terms and conditions. The increased charge is usually as high as 29.99% APR, which will apply to new transactions.
Unlike late fees, penalty APRs may not apply immediately. Credit card issuers must give you at least 45 days’ notice before increasing the APR on new purchases (though it can apply to purchases you make more than 14 days after the notice is given). The penalty APR may only apply to existing purchases after you miss your payment by more than 60 days.
Your card’s terms outline when you can take on a penalty APR (after late payments, returned payments, etc.) and how long the penalty APR may apply. After several months of rebuilding your positive payment history without more missed payments, you may qualify for the penalty APR reverted to your regular APR.
Credit score impact
The longer you leave a missed credit card bill unpaid, the more significant the effect it can have on your credit. Missed payments make up part of your overall payment history on your credit report. Because payment history is the most influential factor in your FICO score, missed payments can hurt.
If your payment is late by only a day or even a week, it will likely not impact your credit history. You can settle the payment with your credit card company before any credit bureau reporting, and ensure you don’t miss another payment.
After 30 days (usually the end of the next billing cycle), your missed payment may get reported to the credit bureaus — Experian, Equifax, and TransUnion. That’s when you’ll see an impact on your payment history and credit score. The longer you leave your credit card unpaid, your issuer will continue reporting it as delinquent. Those delinquencies then add up after 60 days, 90 days, etc.
If you still don’t pay the amount you owe, it could eventually lead to a charge-off, another major hit to your credit.
Negative information like late payments remains on your credit report for up to 7 years. More recent missed payments are more detrimental for your score, and become less impactful over time. Still, that’s a long time to let a missed payment hold you back from new loans or lines of credit you may need.
Interest charges
When you miss a payment, you’ll still owe a balance on your card after the due date. Because the grace period ends when your payment is past due, you’ll start accruing interest on that balance when you miss paying it off by the due date. Average credit card APRs are well above 20%, meaning you could take on significant debt in just a short amount of time.
Lose intro APR offer
When you open a card with a 0% introductory APR, you still need to make at least the minimum monthly payment throughout the intro period. If you miss a payment, your issuer could revoke the intro offer, charge interest at your regular rate, or even apply the penalty APR when eligible.
How to avoid missing future credit card payments
Before risking fees or delinquencies, take steps now to ensure you don’t miss a credit card payment.
Set a reminder
It might be the most straightforward fix, but setting a reminder for yourself — with an alert through your email, phone, or on your calendar — can go a long way in helping you remember your credit card’s due date.
Most credit card issuers also offer account payment alerts. When you opt-in to these alerts, you’ll receive a notification by text or email (or whatever your preferred method is) when you have an upcoming payment due.
Change your due date
The due date assigned when you open your account isn’t your only option. You can change your credit card due date to better align the monthly payment with when you get paid or even to help yourself remember the date more easily.
Log into your credit card account from the issuer’s website or mobile app (or call the telephone number on the back of your card) to find out how to change your due date.
Use autopay
Use your issuer’s autopay feature to make sure you never miss a payment. With autopay, you can set up your account to automatically draw your payment from your linked bank account. You can choose whether to use autopay for only the minimum amount due, your entire statement balance, or a custom amount you set.
Most importantly, remember to keep enough money in your linked bank account to complete the automatic payment each month. If you don’t have enough funds when the payment is withdrawn, you could take on fees or penalties from your credit card issuer (and potentially even more from your bank).
This article was edited by Rebecca McCracken
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