What happens if you miss a payment

Resources · Cards, loans and credit · 5 min read Starting out

Key points

• One missed payment usually means a late fee and more interest.
• Depending on the card, it can also end an interest-free period or bump you to a higher rate.
• If it stays unpaid, it may end up on your credit report.
• If you can’t afford the payments, free debt help is free and confidential.

After a missed credit card payment, the usual result is a late fee added to your balance plus another month of interest. Leave it unpaid and things tend to get worse. You might face a higher rate and a mark on your credit report. Over a longer stretch, the account can be treated as in default.

Exactly what happens, and when, depends on your card, its terms and the country you live in. Here’s the general picture.

Straight after the due date

Many cards charge a late fee when the minimum doesn’t arrive by the due date. That fee goes onto your balance, and interest keeps running on the whole lot, fee included.

That’s often not the end of it. On some cards you lose your interest-free period, so new purchases start costing interest straight away. A balance transfer or other promotional rate may end early. And some cards switch you to a higher rate after a late payment. There’s more on that in late fees and penalty interest rates.

What one missed credit card payment costs

Here’s a simple example. The same maths works in any currency.

Assumptions:

• Balance: $3,000
• APR: 22%, monthly rate = 22% ÷ 12, interest added before each payment
• Minimum payment: $90 a month
• Late fee: $35 (illustrative)
• No new spending, and no penalty rate

Paid on time both months. After two payments of $90, the balance is $2,929.36.

Missed in month 1, then $180 paid in month 2 to catch up. The $35 fee lands in month 1, and month 2’s interest is charged on the higher balance. After two months you owe $2,966.65.

So that one slip cost $37.29. That’s the $35 fee plus $2.29 of extra interest. And that’s with no penalty rate. If a higher rate kicked in, the cost would keep building month after month.

Your credit report

A missed payment can be recorded on your credit report. How that works varies a lot.

In many places, a payment has to be late by a certain amount of time before it gets reported. That window depends on the country and the lender. Once it’s there, it stays for a set period, which also varies by country and by the type of record.

How much does it matter? Repayment history is usually one of the bigger factors in a credit score. How much it matters depends on how late the payment was and how recent it is, and the effect usually fades over time.

Credit reporting agencies such as Equifax, Experian and TransUnion operate in several countries. Checking your own report shows you exactly what’s recorded. For more, see what a credit report is.

If payments stay missed

Miss several in a row and the effects get more serious. In general terms, the card might be suspended so you can’t use it. The account might be marked as in default. The debt could be passed to a collections agency or sold to another company, and in some countries there can be legal action to recover it.

Every country has its own rules about how this works and what protections you have. That’s one reason free, independent help is so valuable here.

If you can’t make the payments

Forgetting a payment is one thing. Missing one because the money simply isn’t there is another. And it’s very common.

If you can’t cover your repayments, start with free debt help. Free services in many countries help people look at all their debts and their budget together, and explain the options that apply where they live. They’re confidential. Getting help early often leaves more options open.

While you sort that out:

• Keep essentials first. Housing, utilities, food and getting to work come before card payments.
• Gather your statements so the balances, rates and due dates are all in one place.
• Be wary of paid offers that promise to make debt disappear fast or want big fees upfront.
• Avoid new borrowing to cover payments where you can. It can widen the gap.

If it was a one-off slip

Missed it by accident and you can pay it? Pay as soon as you can. That usually limits the extra interest and the chance of it being reported. Some people set up an automatic minimum payment afterwards as a backstop, then pay anything extra by hand.

Common questions

What happens if I miss one credit card payment?

Usually a late fee and more interest. Depending on the card, you might also lose an interest-free period or move to a higher rate. If it stays unpaid, it may show up on your credit report.

How long does a missed payment stay on your credit report?

That depends on the country and the type of record. The credit reporting agencies where you live publish their rules.

Can I still use my card after a missed payment?

After one, often yes. After several, the card may be suspended or closed. It comes down to the card’s terms.

Try it

To see when your current payments could clear everything you owe, find your Freedom Date. If they can’t, free debt help is free and confidential.

General information only, not financial advice. Your situation is your own.