Why a Missed Credit Card Payment Matters
A missed credit card payment can happen to anyone. Whether you forgot to pay or didn’t have enough funds, it’s important to understand the consequences. Missing a payment can lead to late fees, higher interest rates, and even a lower credit score. Let’s break down exactly what happens when you miss a credit card payment and how you can fix it.
Late Fees Are Added to Your Balance
Credit card companies charge a late fee if you miss a payment.
- Fees can range from $25 to $40, depending on your credit card terms
- If you have multiple late payments, fees may increase
- Some credit cards waive the first late fee as a courtesy, so check with your issuer
Interest Charges Increase
If you carry a balance, missing a credit card payment can make your debt more expensive.
- Interest accrues daily, and missing a payment means paying even more
- You could lose any promotional 0% APR offers on balance transfers or new purchases
- Paying the minimum balance on time can help avoid higher interest costs
Your Credit Score May Drop
A missed credit card payment can negatively affect your credit score, especially if it’s overdue for more than 30 days.
- Payment history makes up 35% of your credit score, making late payments a big factor
- The later the payment, the bigger the impact on your credit score
- Late payments stay on your credit report for up to seven years, but their impact decreases over time
Your Credit Card Issuer May Increase Your Interest Rate
Missing payments can lead to a penalty APR, which is a higher interest rate applied to your account.
- Some credit cards increase your APR after just one late payment
- This higher rate can last for months, making it harder to pay off your balance
- Responsible payment behavior over time may help you qualify for a lower rate again
You Risk Losing Rewards or Benefits
If your credit card offers rewards like cashback, points, or travel benefits, a missed credit card payment might put them at risk.
- Some issuers revoke earned rewards if payments are late
- You may lose promotional benefits, such as introductory interest rates
- Keeping your account in good standing ensures you continue earning rewards
Collections and Legal Action Are Possible
If you continue to miss payments, your debt may be sent to collections.
- Payments overdue by 90 days or more could result in your account being sent to a debt collection agency
- Debt collections can have a major negative impact on your credit score
- In extreme cases, credit card issuers may take legal action to recover unpaid debts
How to Fix a Missed Credit Card Payment
If you’ve missed a payment, here’s how to minimize the damage:
- Pay as soon as possible – The sooner you pay, the less impact it will have
- Call your credit card issuer – Some companies may waive late fees if you have a good history
- Set up automatic payments – This helps prevent future missed payments
- Monitor your credit report – Check for errors and track your score to rebuild credit
Stay on Top of Your Credit Card Payments
A missed credit card payment can have serious consequences, from late fees to a lower credit score. However, taking action quickly can reduce the impact. By paying on time, setting up reminders, and monitoring your credit, you can stay in control of your finances. Avoid missing payments in the future by being proactive, and your credit score will stay strong!
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