What If I’m Late on My Credit Card Payment?

One of the worst feelings you can have is realizing you have to make a late credit card payment. No one enjoys being late on a payment or bill, yet it happens all the time.

One late credit card paymentWhile building ReadyForZero, a free online tool for helping you pay off debt, we learned a lot about late payments. Sometimes people are late because they forget, and others are late because they simply don’t have enough money to make the payment. Whatever the reason may be, when this happens you should be prepared so you know how to deal with some serious (and potentially costly) consequences of a late payment. By being prepared, you’ll likely achieve the best outcome. The three main consequences you need to be prepared to respond to are:

  • late fee(s)
  • a higher interest rate
  • a mark against your credit

Below, we’ll answer the most common questions related to late payments and explain in detail what you should do if you ever have at least one late credit card payment:

Should I call my credit card company about my late payment?

If you know in advance that you’ll be late on a payment, you can call your credit card company before it happens, and let them know you won’t be able to pay on time this month. Depending on your history with the company and whether you have ever made a late payment before, you may be able to convince them to waive the late fee. (Usually a late fee will range from $15 to $35)

Even if you are calling after the due date, you should still make an attempt to talk with your credit card company and negotiate a reduced late fee. Again, if the company values you as a customer, they may be willing to waive the late fee.

However, be wary of saying things like “I have no income right now” or “I can’t pay these cards off” because that can sometimes result in your credit limit being lowered. If you do need long-term help, we’ll discuss some options below that you should inquire about (and you should also make a plan to get out of debt – ReadyForZero can help with this).

How Much Does One Late Credit Card Payment Hurt Your Credit Score (or Credit Report)?

Fortunately, one late payment – whether it’s one hour late, one day late, or one week late – will usually not affect your credit score if you are proactive about contacting your credit card company and remedying the situation as soon as possible. When you’re on the phone with them, ask if there will be any impact to your credit score. Most companies will not report a late payment to the credit reporting agencies immediately, but you should still find out what their policy is.

It’s very important that you pay the late amount as soon as possible, because the more time that goes by between the due date and the time they receive your payment, the more likely they are to report the late payment, and that’s when one late credit card payment will affect your credit score. Which is what you want to avoid at all costs.

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Will My Interest Rate Increase After One Late Credit Card Payment?

Finally, you should also attempt to negotiate with the customer service rep about any change to your interest rate. After all, that can have a much more significant effect on your bottom line in the long run than a mere late fee. In some cases, a credit card company will increase your interest rate by as much as 15 percent after just one late payment!

The good news is that, thanks to the CARD Act of 2009, your credit card company can’t raise your interest rate on your existing balance – that is, the debt you already have on your card – unless you are at least 60 days late.

However, after one late credit card payment they are allowed to raise your interest rate on new purchases. So if you have a balance of $5,000 and you miss a payment due today, you will continue paying the same interest rate on your $5,000 balance, but you might have to pay a higher interest rate on any purchases you make in the future. Keep in mind, the company must notify you in writing if it is increasing

What If I Can’t Make My Credit Card Payments?

If you are struggling to make your monthly minimum payments on your credit card, there are several things you can try to do:

  • See if you qualify for a hardship program: Although these programs are not well-publicized, almost every major credit card company has a hardship program of some kind. The name of the program, and the terms that are offered can vary, so you have to do your research, but these programs can often lower your interest rate and give you an extended repayment plan. However, this also means closing your card – so you can’t charge anymore. And in some cases, simply telling your credit card company that you can’t make payments is reason enough for them to cut off your credit.
  • Use ReadyForZero to organize your debts: Our free online tool allows you to see all your debts in one place and automatically gives you a customized plan for paying them off.
  • Find new sources of income: Another option is to try generating extra income to help pay off your credit cards. This might include doing freelance work on the side, selling unused items on eBay, or renting out a room in your house. We included lots of specific tips on each of these topics in the Zero Debt Action Plan – try it out and let us know if it helps you. (It’s free, by the way!)

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We hope this information helps you if you find yourself in the position of making at least one late credit card payment. Remember, as long as you pay the late amount as soon as possible and get informed about the potential consequences, you will likely be able to escape without too much damage to your credit or your finances. For more information about what happens after the first missed payment, see our article – What Happens If I Don’t Pay My Credit Cards?

This article is part of our Credit Card Debt Resource Center.  If you’re looking for additional information about credit card debt, be sure to pay a visit!

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  • Justin

    If I have an account that has previous 30 day late on it and close the account now does that restart the seven year period of waiting for it to be removed from the day it was originally late or the day I close the account

    • http://www.twitter.com/bwfeldman Benjamin Feldman

      My understanding is the seven year period starts from the time the negative mark is applied to your credit report. So as far as I know, closing the account would not affect the seven year period at all. But to be safe, you may want to dig around and do a bit of research on it.