Whether it's because of an honest mistake or because you just can't get the funds together right now, a missed credit card payment is never a good feeling. Left unresolved, it may also be a costly blunder. However, you might be able to minimize the effects of a missed payment by acting quickly.
If you miss a credit card payment, these five steps may help you get back on track.
1. Settle the account.
First, consider paying at least the minimum amount due on the account if you can. Issuers typically won't report the late payment to the credit bureaus until it's 30 days past due. So if you can make your payment before the 30-day mark, you may not have to worry about the late payment being added to your report - although this isn't a guarantee that your late payment won't be reported before then.
2. Call the issuer.
After missing a payment, you'll likely see two charges: A late fee, usually between $25 and $35, and interest on the balance. If the missed payment was an accident, you may want to call your issuer and explain that the missed payment was an accident, it won't happen again and you've already made a payment.
Then, you can try asking if they will refund the late fee. You can also ask them to refund the interest charges if you've paid the balance in full. Just remember - it's at the lender's discretion to grant your request and they have the right to say no.
3. Call again.
If your first call wasn't successful, consider trying again. The issuer isn't required to refund the fee or interest charges, but it's worth at least a second shot if you usually pay on time and regularly use the card. It often helps to be polite and not make demands, but in a last-ditch effort, you might try saying you're considering switching to a different credit card and see if that prompts a refund.
4. Set up notifications or automatic payments.
Your credit card issuer may allow you to set up an email or text notification that reminds you when future bills are due. Alternatively, to try to avoid being late again, you can set up an automatic payment from your checking account for the minimum amount due, the statement balance or the total balance.
5. Monitor your credit reports.
Even though your credit report may not be affected if you pay at least the minimum amount due within 30 days, this isn't always the case.
If you don't manage to make the minimum payment on time, the late payment could be recorded on your credit report and and it generally stays on your report for seven years.
If your payment is 180 days late, your lender may declare it a charge-off - meaning the issuer takes it off their books but you still owe the money. At that point your account may be marked as in collections on your credit report, and the debt might be sold to a third party that will try to collect the money from you.
If you're late with a payment, the credit card company may also increase your interest rate on future purchases. It's important to pay off your debt as soon as possible because if you miss two consecutive monthly payments (so, if you're more than 60 days late), the issuer can apply this penalty interest rate to your existing balance as well. The 2009 CARD Act requires your card issuer to review your account at least once every six months after it increases your interest rate; however, your issuer may or may not decide to lower your interest rate at that review.
If you've missed a credit card payment, consider making at least a minimum payment as soon as possible and contacting the issuer to request a refund for the fee. The longer you wait, the more serious the consequences will likely be -- acting immediately might just save you from hurting your credit.
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