If you forget the due date for your credit card bill, fail to send the minimum payment or realize you never put a check in the mail, you could be at risk of making a late credit card payment. Whatever the reason for a late payment, there are consequences.
A missed credit card payment can hurt your credit rating and finances both in the short and long term. But you can take steps to repair the damage and avoid repeating the mistake.
When Is a Credit Card Payment Late?
Your credit card payment is late when you don’t make at least the minimum payment by the due date. This can happen if you forget to pay or if your payment doesn’t go through. The issuer may have a cutoff time on your due date, typically 5 p.m. at the earliest, after which your payment is considered late.
A late payment won’t show up on your credit report until you miss a full billing cycle, according to the credit bureau Experian. But you’re likely to face more immediate penalties from the credit card issuer, including a late fee.
What Penalties Can You Expect When You Miss a Credit Card Payment?
When you miss a credit card payment, expect to see a late fee soon after.
“Most issuers will charge a late fee if you are late by just a day on a credit card payment,” says Gerri Detweiler, credit and small business expert.
The longer it takes for you to make a payment, the greater the penalties may become. Your late payment may be reported to the three major credit bureaus, which will affect your credit score.
The annual percentage rate on your existing balances may increase, and you may lose rewards.
Expect these penalties if you miss a credit card payment:
- Late fee: A late fee may be swiftly added to your account when you don’t pay by the due date. Most major credit card issuers charged late fees of up to about $40 in 2020, according to the Consumer Financial Protection Bureau. It can be possible to get the fee waived if you usually pay on time.
- Interest accrual: If you normally pay in full, you’ll lose the benefit of the grace period and will incur interest charges on your balance. Keep in mind that you will also lose the grace period if you pay on time but don’t pay off your full balance.
- Credit reporting: When you miss a payment for a full billing cycle, usually 30 days, the late payment will be noted on your credit report.
- Loss of 0% APR: After one late payment, you could see a promotional APR revert to the regular APR, according to Experian.
- Penalty APR: When you are more than 60 days late with a credit card payment, a penalty APR usually around 29.99% may apply to existing balances. You may need to make six consecutive on-time payments to get the penalty APR removed, according to Experian.
- Frozen rewards: You may lose access to some or all of the rewards earned on your credit card account when your payment is late. Your issuers may also suspend rewards earning and redemption.
Penalties for late payments can be costly. Depending on your balance, the damage you’ll see from triggering a penalty APR on your card can be serious. You would accrue almost $150 in interest over six months at a 29.99% APR if you maintain an average daily balance of $1,000 over that period. The same average daily balance at a nonpenalty APR – say 16.93%, for instance – would accrue closer to $80 in interest over six months.
Do Late Credit Card Payments Hurt Your Credit Scores?
Because payment history makes up 35% of your FICO credit score, a late payment can harm your credit rating. “A late payment is the most important factor in credit scores,” says Rod Griffin, senior director of public education and advocacy for Experian. “If you miss a payment, your credit scores will see immediate and significant damage. Your scores will drop right away.”
Overall, a late payment can hurt higher credit scores more than lower credit scores, but your scores can bounce back faster if you don’t have a history of late payments. The impact of a late payment will fade over time, though the late payment can stay on your credit reports for up to seven years.
From a scoring perspective, the sooner you catch up on late payments, the better. “Your scores can recover relatively quickly depending on your history,” Griffin says. “If you catch up, your scores might recover in about three months.”
And missing several credit card payments within a span of a few months can be more harmful than missing a single payment.
“If you have other late payments or don’t catch up on that late payment repeatedly, there will be a compounding effect on your credit scores to hurt them even more,” Griffin says.
Again, there’s a small window of time where you can to make up a missed credit card payment before any damage to your credit happens, since late payments are typically not reported to credit bureaus until you’ve missed a full billing cycle. So if you make your payment just a few days past the due date, it stays between you and the issuer.
What’s the Penalty For Missing Three Credit Card Payments?
Once you’ve missed three credit card payments, you may have seen:
- Three late fees.
- A penalty APR.
- Frozen or forfeited rewards.
- Credit report damage.
At this point, you’re getting close to a charge-off. A charge-off usually happens between 120 to 180 days of delinquency. In the meantime, you’ll likely face collection activity from the issuer.
What to Do if You Think You’ll Miss a Credit Card Payment
If you’re not sure you can make your credit card payment in time, act ahead of the due date.
Griffin recommends reaching out to the credit card issuer. “They appreciate you being proactive and that can help in terms of preventing a late payment,” he says. “Perhaps they can defer a payment or offer other options to help protect your credit history.”
If you’re not missing a payment due to a truly temporary issue, consider reaching out to a reputable credit counseling agency for help, Detweiler says.
How to Get Credit Card Late Fees and Penalties Waived
If you do miss a credit card payment, act quickly to get in touch with the issuer. Some credit card issuers will waive late fees if you ask – but success depends on your account history.
“Unfortunately, consumers who most need relief from late fees are going to have the hardest time getting the fee waived,” Detweiler says. Consumers who have subprime credit cards and who have difficulty paying bills on time may find themselves in a cycle of missed payments, late fees and interest charges that are hard to escape.
Prevention is the best medicine, and it’s ideal to not miss your payment at all. “Don’t miss the first one, if you can help it,” Griffin says.
Make paying on time easier by:
- Using automatic payments.
- Setting the same due date for all bills, if possible.
- Signing up for text or email payment reminders.
- Developing a monthly bill payment calendar.
If you opt for automatic payments, make sure you pay at least the minimum and have enough money in your bank account to cover each bill. Issuers can charge a fee for payments returned because of insufficient funds, and if your payment doesn’t go through on the first try it could wind up being late, depending on your due date.
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