What Happens If You Miss a Credit Card Payment?

Vivan Rana Credit Guide Podcast Show

There are steps you can take in order to minimise the potential repercussions that accompany missed payments. It is always best to pay your monthly payments on time and in full, but even the most organised cardholder’s can miss a payment.

How bad can it be to miss or be late on one credit card payment? It’s not the end of the world or even your credit. But it could cost you — in late fees, higher interest rates and by lowering your credit score. Here’s what happens.

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Late payment fee:

In most cases, you’ll be hit with a late payment fee.If your credit card bill is 30 days past due, a late fee will be added to your minimum payment and any promotional APRs could be revoked.

Your credit score will take a hit:

Payment history makes up 35 percent of your FICO credit score, making it the single most important factor when determining your credit score.

Your interest rate may go up:

In addition to the late fee, your current interest rate will be applied to your balance.

There are steps you can take to minimize the damage:

• Make the payment as quickly as possible.
• Focus on rebuilding your credit score.
• Avoid repeating this mistake.
• Add positive information to your credit report.