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.
- 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 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
- 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
- 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
- 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
- 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
- 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