What happens when you miss a credit card payment and what can you do about it?

Monday, January 12th, 2015
Updated: January 12th, 2015
The content is accurate at the time of publication and is subject to change.

Have you ever thought about what metamorphoses your credit account undergoes when you miss a payment? Here are several things that can happen to your credit card account in case of missed payment.

  • The credit card issuer can charge you a late payment fee. Most cards have this fee listed in terms and conditions as a flat rate. However, there are cards for which this fee is tiered meaning the fee will vary based on, for example, your balance. However, according to Federal laws you cannot be charged a late payment fee if this fee exceeds the amount due.
  • The credit card issuer can apply a penalty interest rate to your account. In addition to late payment fee you will be “granted” a new, higher penalty interest rate when you miss your payments.
  • You can lose your interest-free grace period. If you are one of those cardholders who avoid interest charges by paying off the card balance in full and on time, the credit card issuer can apply the interest charges, along with fees, to your next payment if you fail to pay your statement balance on time.
  • Your credit score can be hurt. A late payment can lower your credit score, but it depends. A credit card issuer may or may not report your late payment; it depends on how late it was. Most credit card issuers won’t report late payments that are less than 30 days late, other lenders may wait up to 60 days before reporting late payments.

So, what can you do if you miss a payment?

  • The first thing you can do when you realize that you missed a payment is to make an immediate payment. Call the customer service or log in to your account to make it as quick as possible. Make sure the payment was received to increase your chances to get forgiveness from the credit card issuer.
  • Another thing is to contact your credit card issuer to explain the circumstances that caused you to pay late. In most cases, many credit card issuers will waive the penalty charges to satisfy their customers.

We all can sometime miss a payment and it is important to make immediate steps to prevent big harm. Another thing you can do is not to let it happen again. To do that you can switch to electronic statements and set payment reminders or even automatic payments.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

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