Debt Management and Your Credit Score

What to Expect if You Miss a Credit Card Payment

Discover what to expect if you miss your credit card repayments and find out the steps you can take to prevent this from happening again in the future.

Man holding his credit card whilst calling the bank to talk about missed payment

Missing a credit card payment is something that can happen to the best of us. No matter how painstakingly we try to pay all of our bills and repayments, unexpected expenses do pop up, and this can throw our budget into chaos.

Many people believe that missing a credit card repayment is not that big a deal, but it can become a problem that sends your finances into an unending spiral of late fees and increasing debt. To avoid falling into this trap, it’s important to know what to expect when you mix a credit card payment and take steps to prevent it from happening again in the future.

What Happens When You Miss the First Credit Card Payment?

A credit card payment is considered missed when you fail to make a payment by the due date of your current credit cycle. Whether you fail to pay off the entire balance or make the minimum payment, you can expect the following to occur:

1. The card issuer will charge you a late fee

Whether you miss a credit card payment or you are late making the payment, you can expect to see a late charge appear on your next statement. Late fees can be considerably high and will become part of your credit card debt

2. Expect Your Interest Rate to Increase

Missing a credit card payment may increase the interest rate on your card to what is referred to as a penalty interest rate. Quite often, this is the highest rate of interest that applies to the card. This interest is charged to any outstanding balance, and it can quickly add to the amount of credit you owe on your card. 

3. Your Credit Score will be Affected

The moment you miss a credit card payment, your credit score will be affected. Your card issuer will report the missed or late payment almost instantly, and it may take you months to get your credit score to an acceptable level again. 

4. You May Lose Your Credit Card Rewards

Credit card rewards programs rely on the user spending with their credit cards and making payments on time. This means that the special reward you may have been striving for is no longer available to you.

5. You Risk Falling into the Trap of Increasing Credit Card Debt

Once you miss that first credit card payment, you face the risk of increasing your debt due to all the extra penalty fees. If your card issuer has also switched your card to the penalty rates, your debt will continue to increase, which can add a further burden to your finances. 

How to Avoid this Vicious Cycle

If you’ve missed a credit card payment, it’s essential to get back on track as quickly as possible. Don’t sit back and wait for the next credit cycle to pass, as this will only compound the problem. If you missed the payment accidentally, contact your credit card provider and explain that it was an honest mistake. Then make the payment as quickly as possible and ask your provider if they will overturn the late fee and the penalty interest charges. If you don’t have enough money to make the entire payment, you should at least try to pay the minimum or as much as you can.

Where possible, try not to use your credit card again until you clear the debt you have. Otherwise, you risk an avalanche of late fees and high-interest charges that will result in your credit card debt increasing every month until it reaches an amount you can no longer handle. 

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