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If you stop paying one of your credit card bills, the issuer may charge you fees, increase your interest rate and report the late payments to the credit bureaus. You may also eventually find yourself the target of debt collection agencies or a lawsuit, which could lead to your wages or bank account being garnished. The exact timeline, events and impact can vary, but here's a closer look at some of the things that could happen.
You Could Be Charged a Late Fee
Your credit card issuer may charge a late fee if your payment is just one day late. The Consumer Financial Protection Bureau (CFPB) capped credit card late fees at $8 in March 2024, but the ruling is caught in legal limbo.
For now, the exact amount of the late fee can still vary depending on the card's terms. Some cards don't have late fees or waive the fee the first time you're late. Others may charge up to $30 for an initial late payment and a higher fee (up to $41) for subsequent late payments within six billing cycles.
You Can Lose Promotional APRs
Missing a payment could also lead to the immediate loss of a promotional annual percentage rate (APR).
You might have accepted an offer to receive a temporary lower APR on one of your cards. Or, perhaps you opened a card that offers an introductory 0% APR on purchases, balance transfers or both types of transactions. If you miss a payment, the issuer might end the promotional rate early and the card's standard APR kicks in.
You Can Incur a Penalty APR
A higher penalty APR might replace your standard APR if you miss a payment. If it does, the higher rate can initially only apply to new purchases you make with the card. However, once you're 60 days behind, the higher penalty APR can apply to your current balance as well.
As with standard credit card APRs, the penalty APR may apply to your balance and compound daily, quickly increasing how much you owe. If you bring your account current, you may be able to get back to your standard APR by consistently making on-time payments for at least the minimum amount due.
Your Account May Be Sent to Collections
Around the 180-day point, the credit card issuer will likely assume it won't receive a payment on the account and will then charge off your account. A charge-off doesn't forgive your debt, however, and the card issuer may also send or sell your account to a collection agency, which will then try to collect the debt. By this point, late fees and interest charges may have brought the total balance much higher than the original unpaid amount.
Your Credit Score May Take a Hit
A card issuer can report your late payment to the credit bureaus—Experian, TransUnion and Equifax—once your account is 30 days past due. The late payments could stay on your credit report for up to seven years and impact your credit scores the entire time. Here are a few things to know about how late payments can affect your credit:
- Your payment history is the most important credit scoring factor. For that reason, a late credit card payment can lead to a large drop in your credit score.
- Score impact can vary. Generally, people with good credit lose the most points from a new late payment. Those who have poor credit may also experience a drop, but it likely won't be as large because their score reflects a higher expectation that they will miss a payment.
- Subsequent late payments are reported as well. The card issuer can continue to report your account as late if you don't bring it current. And your credit report will reflect when your account goes 30, 60, 90, 120, 150 or 180 days late. The further behind you fall, the worse the impact on your credit scores.
- Charge-offs and collection accounts can also result in harm. If you don't bring the account current, the charge-off and collection account could also hurt your credit.
When a series of missed payments leads to a closed account, those payments and related negative marks (such as the charge-off) will be removed from your credit report seven years after the first payment was missed—also known as the date of first delinquency.
When you close an account that's in good standing, even if you missed a payment previously, the closed account can stay on your report for 10 years. But the late payment will still fall off after seven.
Your Creditor May File Suit Against You
A creditor or debt collector can also sue you to force the payment of a past-due credit card balance, including fees and interest that have accrued. If the creditor wins, it may get a judgment that allows it to garnish (take money) from your bank account or paycheck. It may also be able to get a lien against your property.
If you're served with a lawsuit, don't ignore the case or the creditor may be awarded a default judgment in the creditor's favor. States' statute of limitation laws govern how long you can be sued for the debt—it's generally around three to six years. However, collectors can still attempt to collect the debt and making a payment might reset the statute of limitations.
What to Do if You've Missed a Payment
Whether you're about to miss a payment or already fell behind, taking action quickly might help you limit the negative consequences:
- Contact the credit card company to ask for help. If you can't afford the bill because of a temporary setback, such as a natural disaster, medical emergency or lost job, call your card issuer as quickly as possible and ask if they offer any hardship options. You might be able to temporarily lower your interest rate, reduce your monthly payment or skip payments.
- Bring the account current and ask for a refund. If you accidentally missed a payment or recently stopped making payments, try to bring the account current. Then, call the card issuer and see if it can refund any of the late payment fees or interest charges. It's not obliged to agree, but if you've otherwise been a good customer, the company may be understanding.
- Set up alerts and autopay on your cards. If you regularly miss payments because you forget the due date, set up alerts to get emails, texts and push notifications. You can also enroll in autopay for the minimum payment, but make sure you won't accidentally overdraft your bank account.
- Contact a nonprofit credit counseling agency. When you're struggling with credit card debt, a credit counselor might be able to help you set a workable budget or get you on a debt management plan (DMP). With a DMP, the counselor negotiates with your card issuers to waive fees, lower your monthly payments, decrease interest rates and bring your accounts current. You'll then make one monthly payment to the counseling agency, which will pay the credit card companies.
Set Yourself Up for Success
Missing your credit card payments can lead to a string of expensive and credit-damaging consequences. But you don't need to completely pay off your cards to avoid the worst ones. Minimum payments aren't ideal, but they will keep your account current and allow you to avoid fees, penalty APRs and damage to your credit.
Tracking your income and expenses with a budget could also help you avoid using your credit card for purchases you'll have trouble paying for later. But if your struggles don't stem from overspending, your best options may be to communicate with your creditors or get help from a nonprofit credit counselor.