What Happens If You Miss a Payment on a Credit Card?
You will probably pay a late fee
You will probably pay a late fee
This depends on the terms of your specific credit card, but typically missed and late card payments result in a penalty fee. The Visa Classic and Visa Platinum Rewards cards both have a late payment fee of up to $20. Some lenders charge up to $41 dollars. This is where it’s important to read the fine print and disclosures for the credit cards you have in your wallet.
Expect to pay interest on your purchases
Expect to pay interest on your purchases
When you miss a payment, you’ll pay interest on the purchases made during your billing cycle, plus on any balance you were already carrying. The same goes for when you carry after your payment due date, even if you do meet the minimum payment.
The amount of interest you pay depends on your card's Annual Percentage Rate (APR). Some cards have a fixed APR, while others have a variable APR, meaning it changes over time. Check the terms from your card issuer to see what rate you should expect to pay if you miss a payment.
You could pay a penalty APR
You could pay a penalty APR
When you make on-time minimum payments but still carry a balance on your credit card, you pay interest on that amount. But if you miss a payment or make a late payment, you may be subject to an additional penalty APR after 60 days, depending on your card’s terms. One missed payment can get expensive, fast.
The bill could eventually be sent to collections
The bill could eventually be sent to collections
Usually this doesn’t happen right away. Typically it’s not until you haven’t made the minimum payment and it’s at least 30 days past your due date. Again, making at least that minimum payment can save you a whole lot of headache in the long run. After that 30 days, your credit card company begins the collections process on their end. You should expect to start getting phone calls about it.
After a certain amount of time (it may be about 6 months, depending on the lender) your creditor will send the debt on to a third party they contract with. If they still fail to collect the debt, your creditor will eventually sell your debt to a collections agency. Having a bill sent to collections, even if you eventually pay it, typically dings your credit score and stays on your report for seven years.
It may be reported to the credit bureaus
It may be reported to the credit bureaus
In some cases, creditors report any missed minimum payments to the credit bureaus. If the creditor reports your missed payment to the credit bureaus, that information typically stays on your credit history for seven years, and it can dip your credit score.
However, some financial institutions don’t report missed payments right away. It depends on the situation and your financial institution’s policies.
You Missed Your Credit Card Payment By 1 Day … Now What?
There are a lot of ways missing a payment can hurt your wallet—and your credit score. If you do miss a payment, don’t panic. You can always call your financial institution to explain what happened and see if they might be able to waive the late payment fee if it’s the first time this has happened. Even if it’s a no, it doesn’t hurt to ask.
Make sure to pay the minimum as soon as possible once you realize you’ve missed a payment. Then do everything you can to make sure this doesn’t happen again. Setting up automatic payments through your financial institution’s online banking can help you get payments in by the due date.
When in doubt, it’s always best if you can at least make your card’s minimum payment on time. RMCU’s online banking makes it easy to set up auto pay or make a card payment from anywhere. See if you qualify for membership*, and take advantage of all the services your neighborhood credit union offers.
*Must qualify for membership. On approved credit. Some restrictions may apply. Each account is privately insured up to $250,000 by American Share Insurance. By member’s choice, this institution is not federally insured.
