Man looking over his bills in the kitchen
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A missed credit card payment can be the result of poor planning, negligence or unfortunate circumstances, but there’s only so much time you can spend dwelling on why it happened. Your next step should be addressing the issue as soon as possible. An unresolved outstanding balance can lead to late fees and interest charges, which can turn a minor mishap into a big blunder.

Knowing the repercussions of an overdue balance can motivate heightened discipline in your credit card habits. So let’s get you up to speed on what happens when your payments start to lag behind.

When a payment is considered late

You should look into your credit card agreement and read the fine print to be certain, but most card providers consider a payment to be late as soon as the due date has passed. With most cards, a completely missed payment draws the same penalties as paying less than the minimum amount due, so be sure to be both timely and sufficient when paying your bills.

The consequences of missed payments

If your debt has been delinquent for 30 days or less, you have a chance to stem the tide before things get ugly. Your debt collectors will likely contact you and you’ll probably have to pay a late fee, but you should be able to address the problem before it elevates. Many card issuers allow for one missed payment before charging a fee, but it’s worth talking to your issuer even if that’s not written into your credit card agreement.

Despite some of the headaches, there is a concerted effort to retain cardholders. So while dealing with customer service may not be ideal — you could be fortunate enough to be granted an extension, an altered payment plan or even have the fee waived entirely. The key is to act fast.

30 to 90 days overdue

As your outstanding debt moves past 30 days of delinquency, your bank will likely start to contact you a little more intently. Paying a missed bill within the 30 day period can be seen as a simple mistake, but credit providers will give you less leeway when a simple mistake starts to look like a trend. If you have outstanding debt, bill collectors will likely start to call you every 15 minutes with an automated message reminding you to pay off your delinquent balance. Also, your credit will be impacted. According to FICO, a credit score of 680 could take a 10 to 30 point hit and a score of 780 could slip anywhere from 25 to 45 points.

If you’ve reached that point, you could be penalized with late fees on the overdue account. The highest overdue charges can be as much as $39 per missed payment, so take care to avoid any late fees.

After missing two payment cycles (60 days past due), credit issuers can label you a “high risk” borrower. This means your interest rate is headed for a sharp increase. In certain cases, credit issuers will charge as high as 29.99 percent annual percentage rates (APRs) — a percentage that won’t deflate until you’ve made six consecutive payments within the guidelines of your credit card agreement. If you’re charged an elevated rate, be sure to request a reset to your APR once you’ve fulfilled the requirements.

Your bank may try to negotiate a payment plan. If this happens, it’s vital that you’re perfectly honest about what you can fulfill. A missed payment is leverage for the bank if the issue is ever taken to court.

90 to 120 days overdue

Once you’ve hit the 90-day mark, your bank’s recovery department will start to contact you with higher demands. Previous calls might center around a new payment arrangement or collecting a partial amount, but now your issuer will be looking to collect the outstanding balance in full.

Along with your card’s penalized APR, late fees will be through the roof at this point. Also, your credit score will decrease drastically. Take a hard look at your budget to see if a small payment is viable. Your issuer could still offer a payment plan tailored to your circumstances.

Past 120 days overdue

At this point, it’s highly likely that your debt is charged off and transferred to a third-party collector. Your debt collector will likely offer a debt settlement to recover a percentage of the money as soon as possible.

If you’re not able to set up a plan or pay off the past-due amount, you might want to create a debt consolidation plan with a credit counselor. It’s crucial to never let a credit card account get to this point; your credit score will drop majorly, your delinquent debt will be overwhelming and you’ll be seen as a risky cardholder to any potential future issuers.

Tips for managing missed credit card payments

The backlash of overdue bills can be brutal, so it’s important to set yourself up for success. Here are some ways you can avoid a tough situation:

  • Set up automated payments: Nearly all issuers allow for automated payments. You can also inquire about changing your bill due date. Set up your system and budget accordingly to pay at least the minimum amount each month.

 

  • Address the issue ASAP: Even if it’s only paying the minimum amount due on the account, making the effort within 30 days could keep your issuer from reporting your late payment to credit bureaus. If you’re beyond the 30-day point, negotiate or set up a repayment plan before the fees, interest charges and time gets out of control.

 

  • Be honest with your bank: If you’ve fallen into a situation where your debt collector is trying to collect any amount of money from you, be transparent in what you’re able to pay. Setting unrealistic expectations could bite you in the end.