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What Happens If I Miss Payments on My Credit Card?

There are a number of potential consequences of missing payments on a credit card, and none of them are good. In order to avoid these problems, it's important to pay credit card bills on time whenever possible. Sometimes, though, there simply isn't enough money to pay every bill for the month. It's also easy to accidentally forget to make a payment once in while. If either of these scenarios should happen to you, the consequences can be a temporary annoyance, or it could cause significant long-term problems.


Virtually every time a person misses a credit card payment, the company places a late fee on the account. This is especially bad if the late fee raises the balance on a card over its credit limit, because that results in an additional fee. The exact amounts of late fees and over-the-balance charges vary between different companies. Typically, they are in the range of $25 to $35 each. These charges continue accruing every month that a payment is missed, or the balance is over its limit. This can add up very quickly to a significant amount of money.


Many people don't realize that the interest rates on their credit cards can be raised for missing a single payment. A card with an introductory zero percent interest rate can quickly skyrocket to 20 percent or higher. In addition, the interest rates for every other credit card that an individual has may be raised for making a late payment on just one card. This is why it is so important for people to read and understand the terms of service for every card they have, ideally before applying for them.


Missing a credit card payment also usually shows up on the person's credit report. This is how companies, other than the one that was not paid, learn about the event and raise interest rates. It also lowers the individual's credit score, which can have a variety of consequences. A single late payment is not usually a huge problem, but if it happens multiple times or with multiple lenders, this becomes a red flag to anyone who views the credit report. It becomes more difficult to get a mortgage, car loan, and new credit cards in the future. Landlords may turn down a rental application based on a poor credit score. Cell phone companies and utilities require deposits for customers who are considered high risk. Even potential employers sometimes look at credit histories before deciding which candidate to hire.


When a credit card balance is not paid for a number of months, the company typically closes the account. This means that the card can no longer be used, and it will be denied if someone tries to put charges on it. The credit card company turns the debt over to a collection agency, which will then try to get back the amount of money that is owed. Having this happen is very damaging to one's credit history. The more payments that a person misses, the lower their credit score will drop and the more consequences they will have to deal with.


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