What Happens If You Fail to Pay Your Credit Card Bill?

Credit cards allow you to pay for everyday or large purchases and have a small window to pay them off. All purchases made during the billing period of 28 to 31 days are added to your statement balance.

After the end of each billing cycle, you receive a statement with your total balance owed and the minimum amount due.

You, in turn, agree to pay at least this minimum amount by the due date so that your payments are on time and no interest or penalties accrue. Generally, you have 21 to 25 days between the end of your billing cycle and your payment due date, called a grace period, to pay your bill. So, if you pay your credit card statement balance in full by the due date every month, your grace period continually renews, and you will never pay interest on purchases.

If you don’t pay your credit card, below are some consequences and scenarios that may vary depending on how late your payment is and the terms and conditions of your credit card issuer.

Missing one credit card payment

Let’s say you lost your credit card statement or simply forgot to make a monthly payment. When this happens and you don’t pay your credit card bill or at least the minimum payment due on time you will be immediately charged a late fee of about $25–$41, depending on the credit card terms. In this case, it’s best to make the payment as soon as possible.

If you think you’re going to miss your monthly credit card payment, reach out to your credit card issuer to see if they can change your due date to unforeseen circumstances or at least delay reporting the late payment to the credit reporting agencies that handle your credit report.

Not paying a credit card bill for 60 days

When you fail to pay your credit card debt over several billing cycles, the consequences can be more acute, including late fees, increased APRs, bad marks on your credit report, and charge-offs.

After the second missed payment, you will be charged another late fee, and the credit card issuer is more likely to report your delinquency to the credit bureaus. All the more so, if you are 90 days late, it will almost always be reported. Most derogatory marks remain on your credit report for seven years, but some of the more serious ones could stay on it for up to 10 years.

Being more than 30–60 days late usually lowers your credit score, which means you will have to pay higher interest rates on any credit cards or loans you get in the future.

If you fall behind on your payments, your credit card’s annual percentage rate (APR) can also be affected. Your credit card issuer may charge you a higher penalty APR, which will be applied to your card balance and future purchases. The penalty APR can be as high as 33.74%, which significantly increases the amount you owe.

During this time, your card issuer will contact you by phone, email, or mail reminding you that your account is delinquent.

You haven’t paid your credit card for more than 120 days

After your account is 6–7 months past due, the credit card issuer can sue you for unpaid credit card debt. Or the card issuer will charge off your account. That means it will close your credit card, write it off as a loss, and sell it to a third-party collection agency.

The charge-off goes on your credit history, which further worsens your credit score. You can also expect debt collectors to start contacting you to get you to pay up. In addition, the agency can file a lawsuit against you if they’re unable to recover the debt from you.

Final thoughts

Of course, the consequences of non-payments depend on how long you’ve been missing your card payments. But either way, once it all piles up, it can be hard to get back on track. Therefore, try to make at least the minimum payment every billing cycle, as your credit history makes up 35% of your credit score.