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What happens if you don’t pay your credit card?

Find out how missing a payment could affect you and what to do about it.

Updated

If you’re unable to pay your credit card minimum payment, you’re not alone. Sometimes, you just need to put that money elsewhere. Many Americans, especially now, are also experiencing financial strain due to the coronavirus pandemic.

With that said, there are serious repercussions for missing the payment due date. Here’s what can happen if you miss that payment and what you can do to minimize the impact.

Hardship and deferment options during coronavirus

Many banks have begun offering assistance to cardholders impacted by the coronavirus. Types of assistance include deferred payments, waived fees and more. You can read more about what coronavirus assistance your issuer offers at our running guide.

The consequences of not paying your credit card on time

What happens when you miss a payment on your credit card varies depending on the circumstances and your credit card provider. If you fail to pay your minimum payment, the penalties you face can include:

  • Late payment fees. Most credit cards charge you a late fee if you don’t pay the minimum amount required by the due date on your statement. This can be up to $39 and is applied after the due date on the statement.
  • Credit history marks. The details of your missed payments can stain your credit score for up to seven years.
  • A penalty APR. Most credit card providers charge a penalty APR if you make two or more missed payments. This can be up to 32% and it can apply indefinitely.
  • Loss of your intro APR period: missing your credit card payment often leads to losing your 0% intro APR period. This can seriously impact your finances, especially if it’s early in your intro APR period.
  • Loss of rewards: if your rewards card falls into delinquency, there’s a good chance you’ll lose the ability to earn and redeem your rewards. For most rewards cards, your account needs to be in good standing to participate in the rewards program.
  • A default notice: if you hold a delinquent credit card for 60 to 90 days, it can be classified as being “in default.” This results in an official notification from your credit card issuer and a listing on your credit history.
  • Forced account closure: if your bill goes unpaid for a long period of time, your issuer may shut down your account. Default account listings are a major black mark on credit files and should be avoided at all costs.

What to do if you’re unable to pay your credit card minimum payment

If you’re struggling with money and know you won’t be able to pay your credit card when due, stay calm. These steps will help you deal with the situation, help reduce the impact a delinquent payment could have on your finances and reduce credit card debts over the long term.

  • Contact your credit card company.
    Call your credit card company using the phone number on the back of your card and let them know about your circumstances so they can work with you to resolve the situation. This might sound a little strange, but credit card companies are more than willing to help you find a way to resolve your situation. After all, they’d much rather you pay off your card eventually rather than never. Reaching out to your bank is especially important during times of emergency – many banks are offering additional support during the coronavirus pandemic, for example. A few common options include:

    • Request a due date extension.
      If you know when you will have money to pay at least the minimum off your card, you could request that your credit card company extend the due date for this particular statement. If your request is approved you could avoid fees and negative details on your credit report, but it will be at your credit card company’s discretion.
    • Suggest a hardship plan.
      If you’re experiencing ongoing financial hardship or illness and don’t know when you’ll be able to make the minimum payment on your credit card, consider a hardship plan, also known as a credit card payment plan. This is a formal legal process where you ask your lender to vary the terms of the contract. It could involve a lower interest rate, lower fees and penalties, fixed payment schedule or some other option that takes the immediate pressure off you while you deal with the situation.
    • Bargain. If you’ve traditionally had a positive relationship with your provider, you might try bargaining on your own terms. This can help you create a payment plan that exists outside of the typical relief options offered by your provider.
  • Get your finances in order
    Once you get a little breathing room between you and your bills, take stock of your income, bills, what you owe on your credit card and any other financial information in your household. This can give you a wider view of what you owe versus what you make and how you might tackle this challenge.As part of this review, you should re-review the rates and fees of your credit cards. Knowing this information will help you when it comes to prioritizing which credit card bills need your attention first.Take care to factor in all of your living expenses when you review. It can be easy to overlook a few simple expenses, such as internet or transportation costs.
  • Consolidate if possible
    If you have multiple credit card bills and can’t manage to pay the minimum on all of them, look into your balance transfer options. You can simplify your payments while potentially netting a promotional 0% balance transfer APR. With the right card, you can save big on interest over the long term.
  • Prioritize
    Figure out which payments deserve your attention first. These are often cards with high interest or cards currently sporting a 0% APR promotional period. The less you spend on interest, the better. Depending on the length of your payment delinquency, it might prove beneficial to make payments on more recent bills as well – not all issuers report late payments at the same rates, meaning you might protect your credit score by making a payment on the right card. If you have debts outside of your credit card, such as student or car loans, take those into account as well when prioritizing. Missing too many payments on something like your house or car could mean the loss of that item.

Tips to help you pay your credit card balance on time

  • Budget for payments.
    Do you find that you can’t afford credit card payments? Factoring your credit card payments into your ongoing budget will help ensure you’re financially prepared for each statement due date. You may even want to go over your previous statements and work out your average payment, or use our repayment calculator so that you get a clear idea of what you’re likely to owe each month.
  • Sign up for automatic payments.
    Most credit card companies provide an auto payment option for your account. This means the funds will automatically come out of your nominated debit or savings account before or on the due date for each statement so that you don’t have to worry about late payments. You’ll also have the option of paying the full amount owed, the minimum, or a fixed dollar amount as long as it’s more than the minimum required.
  • Pay off your card before the due date.
    If you’re going overseas or know you might forget about your credit card payment in the future, you could choose to pay off the balance sooner than required. The due date on your statement is really the latest you should make a payment, so transferring money to your credit card account before that is fine.
  • Choose a card that suits your needs.
    One of the most important things to consider when you have a credit card is whether or not it works for you. For example, if you have a card with a high annual fee and high interest rate but rarely make purchases and carry a balance, it will be more expensive and more difficult to make payments when compared to a card with low fees and a low ongoing interest rate. Think about how you use your credit card and the features you want, and then compare your options to find one that offers the most value based on these needs.

How a balance transfer could help

If you’ve got a large outstanding balance and you’re worried you can’t meet your minimum payments, using a balance transfer credit card can help. These cards let you move your existing balances onto a new card, one that usually has a 0% introductory APR on balance transfers for a certain length of time.

This means you could move your debt to a balance transfer card and give yourself up to 21 months to pay it off without worrying about interest.

Compare balance transfer cards

Have a look at your balance transfer card options to find one that suits your needs.

%
Name Product Amount saved Balance transfer APR Balance transfer fee Recommended minimum credit score Filter values
Citi® Diamond Preferred® Card
0% intro for the first 18 months (then 14.74% to 24.74% variable)
$5 or 3% of the transaction, whichever is greater
740
Long 18 months intro APR periods on purchases and balance transfers. Plus Citi Entertainment℠ for deals on dining and going out.
Citi® Double Cash Card
0% intro for the first 18 months (then 13.99% to 23.99% variable)
$5 or 3% of the transaction, whichever is greater
740
This one of the most valuable flat cashback cards. It comes with 2% cash back (1% when you buy plus 1% when you pay) and 18 months to pay off transfers.
Luxury Card Mastercard® Titanium Card™
0% intro for the first 15 billing cycles (then 14.99% variable)
$5 or 3% of the transaction, whichever is greater
700
Enjoy unique excursions, privileged access to exclusive events and insider opportunities.
TD Cash Credit Card
0% intro for the first 15 billing cycles (then 12.99%, 17.99% or 22.99% variable)
$5 or 3% of the transaction, whichever is greater
680
3% on dining and 2% on groceries make this a valuable card for food purchases. Use it while traveling, too, with no foreign transaction fees. Available in: CT, DC, DE, FL, MA, MD, ME, NC, NH, NJ, NY, PA, RI, SC, VA, VT
CardMatch™ from creditcards.com
See issuer's website
300
Use the CardMatch tool to find cards you're likely to qualify for with your credit score, without a hard pull on your credit.
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Compare up to 4 providers

Bottom line

Can’t pay credit card debts? If you’re strapped for cash or not keeping track of your credit card bills, you could miss the payment due date and end up dealing with a whole range of subsequent issues. But being aware of the potential impact and what you can do about it will help you manage your credit card payments in a way that works for you. And if you need more help solving your credit card debt, check out our full guide.

Compare credit card options to find a card that suits your financial needs to avoid getting into debt.

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