Whether the due date slipped your mind, your payment failed to go through or you were short on funds one month, you missed your credit card payment. While never ideal, the steps you take next can make a difference in how big of a problem that missed payment ends up being.
It’s important to act fast — a missed payment can have some major impacts the longer it lingers, from late fees and interest accrual to negative effects on your credit score. Below, we break down what to do when you realize a credit card payment is overdue, as well as the consequences that missed or late payments can have.
What should you do next if you’ve missed a payment?
The moment you realize you have missed a credit card payment, make at least the minimum payment. Time is of the essence here for a couple of reasons: For one, “if you make your payment right away, you may even be able to avoid a late fee,” said Bankrate. Secondly, “if your payment is less than 30 days past due, you can avoid it hitting your credit report” and thus negatively impacting your credit score, said CNBC Select.
This may also be a good moment to contact your credit issuer. “If this is your first late payment, chances are good that your card issuer may waive the late fee,” said CNBC. If you are in a position where you are not able to pay, your credit card issuer may be willing to help you figure out a plan.
What are the consequences of missing a credit card payment?
A number of things can happen if you miss your credit card payment, though the exact ramifications will depend upon how far past due it ends up being.
Late fee: A late fee, typically of around $40, may apply the first time you miss a payment. If this is not your first time being late, that fee could be higher.
Penalty APR: When you’re “over 60 days late with a credit card payment, you can get slapped with a higher-than-average APR — usually around 29.99%,” said U.S. News & World Report. This may go back down again after meeting certain requirements, such as making a particular number of on-time payments.
Loss of certain benefits: Issuers can “roll back your payment grace period, suspend your card, remove promotional interest rates, take back rewards and more,” said Credit Karma.
Drop in credit score: The “longer you go without paying, and the higher your original credit score, the greater the impact on your credit score will likely be,” said Credit Karma. Keep in mind, however, that issuers typically do not report late payments until they are at least 30 days past due.
How can you avoid missing another payment in the future?
If missing a payment is a one-off thing, your issuer may be willing to work with you. But make it a repeat occurrence, and the repercussions can get even more extreme. To avoid it happening again, consider setting up autopay to cover at least the minimum due (though just make sure you maintain a bank account balance to cover that amount).
If you are not comfortable having the payment automatically deducted from your bank account, you can also set up a payment reminder for yourself, whether that is a calendar notification or a text or email alert from your issuer.
Time is of the essence