It may be simple to miss a credit card payment if you are juggling a half dozen different bills all with different due dates, and you have not still set up autopay. A missed credit card payment can have a lot of consequences. The effect of a late payment depends on how late that payment is and the terms of the credit card. You can incur a late payment fee, penalty interest rate, and risk damage to the credit score.

Consequences of a missed credit card payment

The consequences of a missed and late credit card payment change based on how several days your payment is past due. If you missed a credit card payment by 1 day, it isn’t the end of the world. Credit card issuers do not report payments that are less than one month late to the credit bureaus. If your payment is 30 or more days late, then the penalties may add up.

Common results of paying late include:

Late payment fee: In most cases, you will be hit with a late payment fee. This fee is up to $40.

Penalty APR: A late payment may cause your interest rate to spike higher than your regular purchase APR. However, penalty APRs can be reverted back to the regular APR by meeting specific needs like making 2 consecutive payments on time.

Cancellation of intro zero percent APR periods: If you are benefiting from an introductory interest-free period, you risk losing out on the offer if you will make a late payment.

The late payment is added to the credit report when your payment is more than one month late. An entry is added to your credit report and may stay for 7 years. If you miss the next payment, the entry is updated to 2 months, and so on in 30-day increments unless your account is charged-off after 180 days.

You can lose credit card rewards. A late payment can cause you to forfeit some or all of the rewards you have accumulated. At least, you can be unable to redeem rewards if your account is past due.

How will missing payments affect my credit record?

Your missed payments and default notice will be recorded on your credit report which can affect your credit score and make it very difficult for you to access financial products in the future. If you are struggling to repay your loan, your lender can pass the debt on to a collection agency. Your debt is sold to the agency, so it’ll then take steps to recoup its money, plus a profit, from you. You can find that lender or the debt collector files a County Court Judgment (CCJ) against you.

You’ll receive a judgment in the post, and it’ll explain:

  • How much you owe
  • How to pay
  • The deadline to pay
  • Whom to pay?

You’ll be given a month to pay back the amount owed, but if you’re unable to, the judgment will be added to your credit report and remain there for 6 years.

What You Should Do if You Missed a Payment

Thankfully there are instant steps you can take to decrease the issues associated with a missed due date.

Pay your bill now

Call your creditor or go online to pay the bill right away. Sending payment by cheque will cause more delay, and if it isn’t rapidly received and processed, you can reach the dreaded 30-day-late mark.

Ask the creditor for a break

Once the payment is posted, call the creditor and then ask to speak to somebody who may help you with the account. If you have a compelling reason to pay late, explain what occurred. Even if you do not have a better excuse, politely request that the late fee be waived. Several credit issuers will grant your wish on the spot, particularly if you are managing the account well. If the issuer has raised your interest rate, ask how you can get it back down. For instance, they can low it if you pay on time for the next 6 months.

Sign up for automatic bill pay

A common reason people pay their bills late is that life gets in the way and they forget. You may avoid this problem by enrolling in the autopay system of the bank, which will submit payment for you on the month’s day. If you have to pay your payment on the 15th, then you should have the amount owed that will be deducted from the checking account on the 11th, guaranteeing on-time payments as you have the money in the account to cover it. Obviously, you need to yet monitor accounts, but it is the best way to streamline your financial affairs.