What Happens If You Miss a Credit Card Payment?
Wondering what happens when you miss a credit card payment? Perhaps you were unable to make your monthly installment last week. Or maybe you’ve suddenly realized a late fee has been assessed due to nonpayment.
Accidentally missed credit card payments happen from time to time. Recent changes in your regular routine can lead to slip ups. Whatever the case, get the answer you seek right here.
Make Your Payment ASAP
First things first: If you’re only a few days late in making your credit card payment, bring your account up to date as soon as possible. Often, you can avoid a late payment if you make at least your minimum before your next billing cycle begins.
Creditors typically report delinquent accounts at the 30-day mark. It’s no guarantee, but if you can make your payment before it’s 30 days past due, you could be saved from a 7-year derogatory mark on your credit report. Not to mention, a negative impact on your credit score.
Though the damage to your score lessens over time, a missed payment can haunt you for years. If you can make the minimum payment, it’s wise to do so.
What to Expect if You Miss a Credit Card Payment
Don’t kick yourself over this. It’s better to know what to expect and do everything you can to get back on track. And that’s why you’re here. So, review this quick list and understand more about what happens when you miss a credit card payment.
It’s likely that you’ll see two late fees: up to $29 after the first time you’re late, as well as interest on your balance. If you’ve made a mistake, it’s best to pay off the balance and call your issuer. Explain the accidental missed payment to them.
You can ask for a refund on the late fee. And you can even ask for a refund on the interest charges, since you’ve paid your balance in full. It’s their right to either grant your request or deny it.
Note: You can see late fees up to $40 after your first offense.
Loss of Promotional Rate
It’s very possible that missing a payment will cause you to forfeit a promotional rate. In this case, expect to see your interest rate go up.
Lower Credit Score
If you miss your credit card payment and do nothing, your credit score will suffer. It’s true that 35% of your score is based on payment history. So, when nonpayment is reported, your credit profile takes a hit.
What Can You Do If You Miss a Credit Card Payment?
Communicate. Call and ask for leniency. Sometimes, this does the trick. If you’re not habitually late with payments and you use your card regularly, your creditor may waive the late fee after you explain your situation.
They don’t have to, though. And if they don’t, consider it a lesson learned, and do your best to never miss a payment again.
Tips: Set up notifications so you’re alerted a few days prior to your payment date. Check with your card issuer. They may feature email and/or text notifications. Another option is to sign up for automatic payments.
The worst thing you can do is shut down and let the issue go unresolved. If delinquency continues for a few months, your account could go to collections or be charged off. You could be sued.
That said, do everything you can to make at least your minimum payment. And don’t be afraid to call the credit card company and explain what’s going on. Accidents happen. Life happens. It doesn’t have to negatively affect your buying power, though.