What Happens if I Miss a Credit Card Payment

People always experience unexpected situations such as layoffs during Covid-19 or a medical emergency, which ultimately prevents them from making their credit card payments. There are many consequences if one continues missing credit card payments; including late fees, high-interest rates, and even lawsuits.

Normally, a credit card payment will be considered late if it’s past the due date by 30 days. Depending on the missing days, the consequences are different. 

If you are 30 days late

If you miss your credit card payments by 30 to 59 days, you will receive a late fee and potential interest from your card issuer. Furthermore, it will directly affect your credit score as well due to payment history being one of the biggest components in calculating one’s total FICO score. The missing payments will cost you 60 to 110 points of your credit score. 

If you are 60 days late

If you miss your credit card payments by 60 to 89 days, your card issuer will increase your interest rate to the penalty APR for around 6 months. Different credit card issuers have different penalty APRs and the highest one can go up to almost 30 percent, which could be expensive to many customers. However, if cardholders can make their payments regularly afterward, their credit scores can recover after a short term period.

If you are 90 days late

If you miss your credit card payment by 90 days, it will be a sign of you suffering from financial trouble. The card issuers will not only charge you extra fees and penalty APR but also lower your credit limit. There is also a possibility that the debt collector will reach out to you individually about the late payments. 

If you are 120 days late

If you miss at least four credit card payments, you will get the same punishments as the ones from 90 days late and even harsher. Once you are 180 days late, the card issuer will likely write off your debt as a financial loss, which is known as a charge-off. A charge-off will potentially leave a huge negative impression on your credit report.

A few ways to prevent one from missing credit payments

There are many ways one can prevent missing his or her credit card payments and avoid consequences. You can review your monthly budget and manage your spending to leave room for your credit card payment. If you know you are going to miss a few credit card payments, you need to inform your credit card company instead of hiding from them. Last but not least, you can also ask debt consolidations and seek help for them before your late fees and interest rates become uncontrollable. 

With all that being said, it is helpful to be fully aware of the consequences you will face if you are missing credit card payments. From late fees and additional interest rates to a charge-off, cardholders must pay attention to their monthly budget and spendings to avoid these consequences.