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Credit Card Basics

What to Do if You’re Late on a Credit Card Payment

If you have a credit card, there's nothing worse than logging in to your account and seeing the words "past due." Your first impulse might be to envision fees, interest and damage to your credit scores piling up. And it is true that potential consequences could take a financial toll and endanger your ability to secure good financing rates in the future.

But being late on a credit card payment isn't the end of the world. There are steps you can take to minimize the harm and to make sure you prevent it from happening again. Here's what you need to know.

What to Do When You Miss a Credit Card Payment

Even the most financially responsible people can miss a payment due date. Life may have thrown you a curveball, finances might be temporarily strained or you may have simply forgotten to pay your bill. Whatever the reason, don't beat yourself up about it or let the stress of forgetting to make a payment stop you from taking action. Here's what you can do.

1. Pay the Bill Immediately

If possible, the first thing you should do is hop online or make a call to your credit card issuer and make a payment immediately. The sooner you're able to pay off your late statement balance (or at least make the minimum payment), the more likely you'll be able to avoid certain consequences, such as additional late charges, interest fees or credit score harm. If you make a payment soon after your bill is due, your late payment won't appear on your credit reports (this happens once you're at least 30 days past due on your payment).

2. Negotiate a Fee Waiver

Your financial institution will probably charge a late fee for your missed payment. These tend to be around $25 to $40—not a huge expense, but still enough to make a difference. If this is your first time being late on a late payment, you might be able to persuade the card issuer to waive the late fee if you call its customer service line. While it is not guaranteed to work, many credit card issuers will waive a late fee once every so often as a courtesy for loyal members.

What Happens When You Are Late on a Credit Card Payment?

If your credit card payment is late, your issuer might notify you that you have missed your payment due date with a call or email. By that point, you've likely already been charged a late fee and incurred other consequences. The longer you go without remedying the situation, however, the worse the penalties will be. Before you get too worried, keep these things in mind.

1. Your Interest Rate May Jump

Aside from late fees, some creditors will also automatically raise your interest rate with a penalty APR as soon as your account is past due. This means you might get hit with a higher interest rate on future purchases. Eventually, the issuer might apply the higher interest to your existing balance as well.

If you're able to make a payment quickly, call your issuer and ask if your APR can be reset to its original lower level. They may say no, but you can try asking again after making on-time payments for at least six consecutive months.

Another thing to be mindful of is that a card issuer may prematurely end promotional interest rates, such as 0% intro APR on purchases or balance transfers, if you're late on making a payment. This could complicate matters if you were planning on taking your time to pay off purchases.

2. Late Payments Can Harm Your Credit

Most credit card issuers will wait one full billing cycle—around 30 days—before reporting the late payment to the credit bureaus. If you can pay off your balance, or at least the minimum amount, before that 30-day mark, you should be in the clear and will not have a late payment noted on your credit report.

The longer you go without getting current on your bill, however, the more severe the harm to your credit scores will be. Credit card issuers can post late payments as 30, 60, 90, 120 and 150 days past due before ultimately sending your debt to a collection agency, which further harms your credit. Negative payment history stays on your credit report even if the account is later paid in full.

How Do Late Credit Card Payments Affect Your Credit?

Since payment history is the most important factor in determining your credit score, late payments can really drag down your scores. With the FICO® Score model, this single metric counts for 35% of your credit score, over a third of the overall calculation. So, anything you can do to make sure that your payment history only has "on time" statuses will help you keep your score healthy.

Once a late payment is recorded on your credit report, it will remain there for up to seven years, so it is imperative that you try to avoid this at all costs. A late payment's impact on your credit scores can vary, and tends to be more exaggerated for those whose scores are high. Its impact will also be blunted as time goes on, with more recent late payments taking a bigger toll on your credit score than older ones.

Paying off an account that's been sent to collections might be a wise move to stop calls from debt collectors and improve how lenders view you, but its impact on your credit scores could be moot.

How to Avoid Missing Credit Card Payments

Sometimes you simply cannot afford your minimum payment due to circumstances beyond your control, such as a changing personal financial situation due to loss of work. However, if your finances are relatively steady, there are a few simple steps you can take to ensure that you do not miss a payment by accident.

1. Automate Your Payments

The easiest thing you can do to make sure you don't miss another payment due date is to set up autopay on your accounts. You can usually set the payment date and the amount you want to pay (either for a set dollar amount, your minimum payment or your entire balance). Just make sure you have enough money in the account the payment will be drawn from so you are not hit with an overdraft. If you don't want to set up autopay, consider enrolling for text or email reminders instead.

2. Change Your Payment Due Date

Many credit card issuers let you choose a payment due date for each account. Doing so will allow you to choose a day that works best for your finances. For example, if you are paid on the first of every month, you might ask your credit card issuer to change your due date to the fifth of the month. That way, you can be sure you'll have enough money in your bank account when your credit card payment is due without having to plan your finances around a due date later in the month.

This is also a good way to sync up your payment dates across several credit card accounts, so you know to check the balances on all of them at the same time each month. Alternatively, doing this can help you stagger your payments out over the month if it is easier for you to make payments on different accounts at different times.

3. Make Multiple Payments Throughout the Month

You might want to make your credit card payments at several points throughout a billing cycle. By making at least the minimum payment, you'll avoid a late payment dinging your account and lowering your credit score. Then, if your finances allow, you can continue paying off your remaining balance over the course of the month.

4. Build Up an Emergency Fund

If possible, try to put away money in an emergency fund you can use to cover expenses that might arise unexpectedly, such as car repairs or medical procedures. The size of your emergency fund will depend on your earnings, your expenses and your lifestyle. In general, you should try to sock away three to six months' worth of expenses just in case. You should only consider using your emergency fund as a last resort when times are tough and your only other options are taking out a loan and going further into debt. If you have some money set aside, you'll be able to tap into it to make sure you stay up to date on your credit card payments and maintain your financial standing. Once things stabilize, be sure to replenish your account for the next time you might need it.

You're in Control

No matter how financially responsible you are, it can be very easy to miss a payment due date. But before you panic, assess the situation and make at least the minimum payment required on your account as soon as possible. You might then try calling your issuer and asking if they will waive the late fee or undo any penalty APR interest they might have imposed on your account.

By paying within 30 days of the missed due date, you should be able to avoid having a late payment noted on your credit report or doing any significant damage to your credit score. If you want to learn what's on your credit report, get a free copy through Experian. You can also check your scores for free and sign up for free credit monitoring. Careful credit management and making on-time payments reliably can help your credit scores improve over time.

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