What Happens If I Miss a Payment on My Credit Card?

Missing a credit card payment triggers financial consequences beyond a simple late fee. Failing to meet these obligations leads to immediate and long-term repercussions.

Immediate Financial Repercussions

Missing a credit card payment triggers immediate financial penalties. A common consequence is a late fee, which can be up to $40 for a first late payment and may increase for subsequent missed payments. This fee is added to your outstanding balance, becoming subject to interest.

Beyond late fees, a missed payment can also lead to a penalty Annual Percentage Rate (APR). This APR is a significantly higher interest rate, often 29.99% or more. It triggers if a payment is over 30 days late and may apply to existing balances and new purchases, making the debt more expensive. Interest continues to accrue, increasing the total owed.

Credit Score Impact

A missed credit card payment directly affects an individual’s credit report and score. Issuers report payment activity to Equifax, Experian, and TransUnion. Payment history is a primary factor in credit scoring models like FICO and VantageScore, often accounting for 35% to 40% of the score.

A payment is not reported as late to credit bureaus until 30 days past its due date. If paid before this mark, it may not appear as late, though late fees still apply. Once reported as 30, 60, or 90 days late, it significantly lowers a credit score, with the impact worsening the longer it’s overdue. A single 30-day late payment causes a noticeable decline, especially for those with higher credit scores. This negative mark can remain on the credit report for up to seven years from the initial delinquency.

Escalating Consequences of Continued Missed Payments

If missed payments persist, consequences become more severe. An account can go into default after 180 days (approximately six months) of missed payments. The issuer may close the account, leading to a loss of available credit and potentially increasing credit utilization, which further harms credit scores.

A significant escalation is when an account is “charged off” by the creditor. A charge-off occurs when the creditor deems the debt unlikely to be collected, usually after six months of non-payment, and writes it off as a loss. While the creditor no longer actively tries to collect, the debt is still legally owed. Charged-off accounts are reported to credit bureaus, severely damaging credit, and remain on the credit report for up to seven years from the initial delinquency.

Following a charge-off, the debt is often transferred or sold to debt collection agencies. These agencies pursue payment. If collection efforts are unsuccessful, the creditor or agency may initiate legal action to recover the debt. This can lead to a lawsuit, and if a judgment is obtained, it could result in wage garnishment or bank levies, depending on applicable laws.

Steps to Take After a Missed Payment

Taking prompt action after missing a credit card payment can mitigate further negative impacts. First, contact the credit card issuer immediately. Proactive communication is important, as some issuers may waive a late fee, especially for a first occurrence, or discuss payment plans.

Make the payment as soon as possible to prevent delinquency from being reported to credit bureaus, which typically happens after 30 days. If financial difficulties are ongoing, inquire about hardship programs or payment arrangements with the issuer for temporary relief, such as reduced monthly payments or lower interest rates. After addressing the missed payment, monitor credit reports from the major bureaus to ensure accuracy.