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Let’s face it: Missing a credit card payment doesn’t feel good. But rather than kick yourself over it, you might be able to minimize the effects of a missed payment by acting quickly.
The worst thing you can do, in many cases, is nothing. Left unresolved, a missed payment might turn into a costly blunder thanks to the combination of a late fee, a potential penalty APR and any interest charged on the balance. Plus, missing the payment due date could affect your credit scores.
Keep in mind that most credit card companies charge interest on a daily basis, so you’ll be charged interest for each day you carry a balance. That means it’s important to settle your account as soon as possible and take steps to make sure you don’t miss another payment in the future.
With that in mind, we’ve compiled some simple guidelines to follow immediately after you miss a payment.
With any luck, you’ll avoid the worst parts of a missed payment and chalk this time up as a learning experience.
- Make at least the minimum payment
- Call the issuer
- Call again
- Set up notifications or automatic payments
- Monitor your credit card reports
- Missed payments because of the coronavirus pandemic
Make at least the minimum payment
If you can, consider paying at least the minimum amount due on the account. Issuers typically won’t report the late payment to the credit bureaus until it’s 30 days past due. 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 reports. Heads up, though: There are no guarantees this will work, and your missed payment could be reported before then.
How often do lenders report to the credit bureaus?
Lenders typically report your balance to bureaus once a month. They can report at different times to different bureaus, so your credit scores may vary across your reports. For a more in-depth look, check out our video primer on how reporting works.
Call the issuer
After missing a payment, you’ll likely see two charges: a late fee and interest on the balance. If the missed payment was an accident, we recommend paying off the balance and immediately calling your issuer to explain that you made an innocent mistake.
Once you’re on the line with a representative, you can try asking if they’ll refund the late fee. You can also ask the issuer to refund the interest charges if you’ve paid the balance in full. Just remember — it’s the lender’s right to either grant your request or say no.
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 probably worth a second shot if you usually pay on time and regularly use the card. Being polite and not making demands is most likely to prompt a refund, but dropping hints that you’re considering switching to a different company could be a solid last-ditch option.
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. You can also set your checking account up for automatic payments. Choose to pay off your balance in full each month, and you may be able to avoid having to deal with interest or late fees (Note: This depends on the balance. For example, you may still be charged interest on your cash advance balance and your balance transfer balance regardless of whether you pay in full or not, because generally there’s no grace period for cash advances and balance transfers).
Monitor your credit card reports
Even though your credit reports may not be affected if you pay at least the minimum amount due within 30 days, this isn’t always the case. Here are a couple of exceptions.
- If you don’t make the minimum payment on time, the late payment could be recorded on your credit reports. This generally stays on your reports for seven years.
- If your payment is 180 days late, your lender may declare it a charge-off. This means that 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 reports 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. Heads up: Some cards don’t have a penalty interest rate, so check your card’s terms and conditions to see if this applies to you.
The Credit Card Accountability Responsibility and Disclosure Act of 2009 requires your card issuer to review your account at least once every six months after it increases your interest rate — but your issuer may or may not decide to lower your interest rate after that review.
Missed payments because of the coronavirus pandemic
The coronavirus pandemic has wreaked havoc on a lot of folks’ personal finances. If you’ve missed a payment or are concerned about missing one, you should know that many credit card issuers are offering relief for card payments. You can see our list of credit card issuer relief measures here, or you can call your credit card company directly to see what help it may offer.
If you think late payments might be a persistent issue for you, take the precautionary steps of choosing the right card and setting up notifications and automatic payments. You’ll want to do all you can to pay by the due date.
But if you’ve just missed a single 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.