5 Min Read | Published: August 30, 2024
What Happens If You Miss a Credit Card Payment?
Find out what happens if you miss a credit card payment, including fees and potential impact on your credit score. See strategies for managing missed payments.
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
At-A-Glance
Missed credit card payments could result in late fees and additional interest charges on outstanding balances.
Generally, card issuers do not treat a payment as late if it comes in before 5:00 PM on the due date.
If you do not make credit card payments on time, they can negatively impact your credit score.
Timely credit card payments are good for your financial health, but missed or late payments can negatively impact your credit score. We all know this, but life sometimes gets in the way. Working too many hours, trying to keep up with kids’ activities, and simply forgetting to make the payments are all reasonable excuses, but they don’t change the consequences of a late credit card payment. Read on to learn what you can do if you’ve missed a credit card payment or think you might be late.
When Is a Credit Card Payment Late?
Generally, card issuers cannot treat a payment as late if it comes in before 5:00 PM on the due date, in the time zone stated on the billing statement.1
If your due date falls on a Sunday or a holiday, some credit card companies will give you until 5:00 PM the following business day before the payment is considered late. These policies vary, so ask your credit card issuer about their policy to clarify.
Does a Late Credit Card Payment Impact Your Credit Score?
Even just one late payment can negatively impact your credit score. However, in some cases, there may be a chance that your late payment won’t get reported to the credit bureau right away. In fact, in some cases, you may have up to 30 days before your late payment gets reported, and if you make your payment in full before the 30 days is up, there’s a chance it may not get reported. Note, however, that this will vary, depending on the credit card company.2
Still, it’s better to play it safe and always pay your credit card bill by the due date. “Payment History,” the category FICO® uses to track late and missed payments, accounts for an estimated 35% of your FICO Score®.3 If a late payment report is submitted to the credit bureaus, your score will likely drop. Late payments can also stay on your credit report for up to seven years.4 Consistent on-time payments, on the other hand, can help your credit score.
Other Things That May Happen When You Miss a Credit Card Payment
The impact on your credit score is only one of several consequences you may experience with late credit card payments. Credit card issuers also penalize cardholders when they pay late. Those penalties could include one or more of the following:
- Late Fees
Credit card companies may charge a fee when you’re late. If it happens more than once, the fee could be higher the second time.
- Interest Charges
Interest accumulates on unpaid balances until they are paid off. Missing a payment means you’ll pay more in interest charges.
- Interest Rate Increases
Credit card companies may also increase your interest rate if you are late. This could add to your credit card debt.
- Credit Card Charge-Off
If you fall behind by more than six months, you risk what’s known as a charge-off from your credit card issuer. Charge-offs are reported to the credit bureaus and can remain on your credit report for seven years from the date of the first missed payment.5
What You Should Do If You Miss a Payment
Don’t panic if you miss a due date. If you’re late, try to make your payment in full as soon as possible. You’ll most likely need to pay a late fee, but there’s a chance that you may be able to avoid it appearing on your credit report if you pay before you’re thirty days past due.
Tips for Preventing Future Missed Payments
The best way to avoid late fees and extra interest charges is to set up autopay for your monthly payments. This ensures you’ll always be on time, provided you keep enough money in your bank account to cover the payments. Review your budget, choose a due date that works for you, and set up autopay. That should eliminate your worry about missed payments.
The Takeaway
Missing a payment on your credit card can result in late fees and a higher interest rate. It may also impact your credit score. If you do end up missing a due date, it’s important to make the payment as soon as possible.
1 “When is my credit card payment considered late?,” Consumer Financial Protection Bureau
2,4 “When Does a Late Credit Card Payment Show Up on Credit Reports?,” Equifax
3 “What is Payment History?,” myFICO
5 “How Long Do Charge-Offs Stay on Your Credit Report?,” Experian
Kevin D. Flynn is a financial services provider, business coach, and financial writer. He lives in Leominster, Massachusetts, with his wife Evelyn, two cats, and ten wonderful grandchildren.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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