What happens if you miss a credit card payment? I’m honestly just overwhelmed with bills right now and I’m worried I won’t be able to make my next credit card payment. I called the company already but they said they couldn’t offer me deferment or anything like that. Is there anything else I can do and how will this affect my credit?
Ashley in Ohio
There’s a small window where you can avoid credit score damage if you miss a credit card payment.
Hi Ashley,
I don’t know how much it will help, but you do have a small window where you can make the payment and avoid credit damage. Credit card companies will not report a payment as missed until it is 30 days past due. This means you have a few weeks to make the payment before the creditor will report it.
Some creditors won’t report a payment as missed until it is 60 days late if you’ve never missed a payment before. However, that is up to the creditor’s discretion. So, your best bet is to do what you can to make the minimum requirement within 30 days of your billing due date.
Keep in mind that credit score damage is not the only concern you need to have. There’s also the matter of late fees.
What Happens If You Don’t Pay Your Credit Card?
Not paying your credit card can lead to late fees, credit score damage, and eventually collections. In this ask the expert video, you’ll learn when each of these things will happen and what you can do to catch up if you’ve fallen behind.
April Lewis-Parks, Director of Education: Hi, it’s April with Consolidated Credit and this is ask the expert.
Today’s question is: What Happens If You Don’t Pay Your Credit Card Debt?
If you can’t make payments to your creditors, you need to call them as soon as you can.
Things are always with no communication. With each payment you miss, late fees will be applied. Those fees can be up to $25 to $40 if you’ve been late before.
After 30 days, your payment is considered missed and the account becomes delinquent. The credit card company will report the delinquency to the credit bureaus. Each month you miss will create a negative notation in your credit history that will remain for seven years.
The account will also be listed as delinquent until you catch up on what you owe. All of this can seriously damage your credit score. Generally, after about 180 days of nonpayment, the account will be charged off. This means the account will be closed and sent to collections.
At this point, the creditor or collector has the right to sue you in civil court. If you don’t show up or you lose the court case, they can do things like garnish your wages. That’s why it’s so important to do everything possible to pay what you owe.
If you’re having trouble making a payment, call the credit card company before the payment is late. If you have accounts that are behind or you’re just finding that the debt is overwhelming, speak with a credit counselor and discuss what options are available to help you get relief.
First, determine when you can make the payment
In your case, Ashley, you took the right first step and contacted the creditor. Unfortunately, they’re not willing to budge on outright deferment and now that COVID protections under the CARES Act have ended, they’re not required to do so. But you may still be able to get them to work with you.
First, look carefully at your budget to see when you would be able to make the payment. Then try calling the credit card company one more time. Having a set date when they could expect the payment might sway them to give you a little leeway. It’s worth a try.
If the payment will be more than 30 days late, you’ll need to make two payments
Be aware that if you are more than 30 days late with your payment, you will need to find funds to make two payments at once. You essentially need to make this payment, plus the one for the next month if you want to avoid having the creditor report the payment as missed to the credit bureaus.
That’s not including late fees. If you’ve been late before, be aware that the fees may be higher. Late fees should be outlined in your credit card agreement or you can call customer service to ask.
Call for credit counseling if you’re having trouble catching up
One last recommendation I’d make is to call (844) 912-1819 to get a free debt and budget evaluation from a certified credit counselor. From what you describe, you may be in a situation where credit counseling would be beneficial.
The credit counselor can help you develop a realistic budget based on current costs. They can also help you see how much a debt management program may help lower your total payments. If so, the program consolidates all your credit card bills into one monthly payment. Then our team works with your creditors to reduce or eliminate interest charges and stop penalties and fees.
This type of repayment plan can be immensely beneficial if you’re having trouble balancing your budget. Most creditors will even bring delinquent accounts current as soon as you make three consecutive payments on time.
Another benefit I should mention is that being enrolled in this type of program will not prevent you from getting secured loans, like a mortgage or an auto loan. So, if you’re trying to keep your credit score up because you’re planning for a major purchase like that, enrolling the program won’t hold you back.
Get a free debt and budget evaluation from a certified credit counselor.
