What Happens When You Miss a Credit Card Payment
The first 30 days: Late fees and interest rate changes
When you miss a credit card payment, the card issuer charges you a late fee—usually $25 to $40 for a first offense, sometimes more if you have missed payments before. This fee appears on your next statement as a separate charge.
At the same time, your interest rate often jumps. Most card issuers include a clause that raises your APR (annual percentage rate) if you pay late. The new rate applies to your existing balance and any new charges you make. This higher rate stays in place until you make on-time payments for six months in a row, at which point the issuer may lower it back. Check your card's terms—the exact timing and conditions vary by issuer.
Your payment is still due. Being late does not erase what you owe; it only adds cost on top of it. If you can pay within a few days of the due date, do so immediately—many issuers do not report the late payment to credit bureaus until it is 30 days past due.
Key Takeaways
- A late fee of $25 to $40 hits your account within days, and your interest rate usually rises at the same time.
- Credit bureaus do not hear about the late payment until it is 30 days overdue, so paying within that window protects your credit score.
- After 60 days late, the damage to your credit report accelerates, and after 90 days, the issuer may close your account and send the debt to a collection agency.
- Calling your card issuer before the payment is due can sometimes result in a one-time fee waiver or a lower interest rate, especially if you have a clean payment history.
- Once a late payment appears on your credit report, it stays there for seven years, but its impact on your score weakens over time.
Days 30 to 90: Credit report damage and account closure
At 30 days past due, the card issuer reports the late payment to the three major credit bureaus—Equifax, Experian, and TransUnion. This is when your credit score takes a hit. The size of the drop depends on your score before the miss: someone with excellent credit (750+) may lose 100 points or more, while someone already in the fair range (600–650) may lose 50 to 80 points.
Between 60 and 90 days late, the damage compounds. The issuer may freeze your account, meaning you cannot make new charges even if you want to. They may also raise your interest rate again or apply additional fees. At 90 days, many issuers close the account entirely and begin the process of sending your debt to a collection agency—a third-party company hired to recover the money.
Throughout this period, you are still responsible for the full balance plus all accumulated interest and fees. Ignoring the debt does not make it disappear.
After 120 days: Collection and legal action
Once your account reaches 120 days past due, the card issuer typically writes off the debt as a loss on their books and sells it to a collection agency or collection law firm. This does not erase your obligation; it transfers it. Now the collection agency owns the right to pursue you for the money.
Collection agencies contact you by phone, email, and mail. They may file a lawsuit against you in civil court, especially if the amount owed is large. If they win the lawsuit, they can obtain a judgment—a court order that allows them to garnish your wages, freeze your bank account, or place a lien on your property, depending on your state's laws.
You have the right to respond to a lawsuit and to dispute the debt if you believe it is not yours or if the amount is wrong. If you do not respond, the court may enter a default judgment against you, which makes collection much easier for the agency.
How late payments affect your credit score and borrowing
A single late payment can lower your credit score by 50 to 150 points depending on how high it was to begin with. This affects your ability to borrow money for years. Lenders use your credit score to decide whether to lend to you and at what interest rate. A lower score means higher rates on mortgages, car loans, personal loans, and future credit cards—or outright denial.
The impact is heaviest in the first two years after the late payment. After three years, the damage begins to fade, though the payment remains visible on your report. After seven years from the date of the first missed payment, the late payment falls off your credit report entirely and no longer affects your score.
Late payments also affect your ability to rent an apartment or, in some cases, to get hired for a job. Many landlords and employers pull credit reports as part of their screening process.
What to do if you have missed a payment
Call your card issuer as soon as you realize you have missed a payment. Explain your situation honestly. If you have a long history of on-time payments, the issuer may waive the late fee or reverse the interest rate increase as a one-time courtesy. This is not may provide, but it costs nothing to ask, and the conversation should happen before the payment is 30 days late.
Pay the full amount owed—the original balance plus the late fee and any interest that has accumulated—as soon as you can. Partial payments do not stop the clock on late reporting; the account remains late until the full balance is paid or a payment plan is agreed to in writing.
If you cannot pay the full amount, contact the issuer again and ask about a hardship program or payment plan. Many issuers offer these for customers facing temporary financial difficulty. A written agreement protects both you and the issuer and may prevent the debt from going to a collection agency.
Do not ignore collection calls or letters. If a collection agency contacts you, you have the right to request written proof that the debt is yours. Under the Fair Debt Collection Practices Act, the agency must stop contacting you if you send a written request, though they may still pursue legal action.
Rebuilding credit after a late payment
Once you have paid the missed payment, your next step is to make every payment on time, every month, for as long as possible. On-time payments are the single largest factor in your credit score—they make up 35 percent of the calculation. Six months of on-time payments may lower your interest rate back to the original level. Two years of on-time payments significantly repair the damage to your score.
Keep your credit card balances low relative to your credit limits. If you have a $5,000 limit, try to keep your balance below $1,500. This ratio, called credit utilization, makes up 30 percent of your score. Paying down balances faster than you charge new ones shows lenders you are managing debt responsibly.
Do not close the card after you have paid it off, even if you do not plan to use it again. Closing an account can hurt your score by reducing the total credit available to you. Instead, keep the card open and use it occasionally for a small purchase you pay off immediately.
Frequently Asked Questions
Will one late payment ruin my credit forever?
No. One late payment damages your score, but the impact weakens over time. After two years, the damage is much less severe. After seven years, the late payment disappears from your credit report entirely. In the meantime, on-time payments and lower balances gradually repair your score.
Can I remove a late payment from my credit report?
You cannot remove an accurate late payment yourself. However, you can write a letter to the credit bureau disputing it if you believe it is wrong—for example, if you paid on time but the issuer reported it late by mistake. You can also ask your card issuer to remove it as a goodwill gesture, though they are not required to do so. Some issuers will remove one late payment if you have otherwise paid on time for several years.
What is the difference between being late and being in default?
Late means you have missed a payment but the account is still open and you can still catch up. Default typically means the account is closed and the issuer has given up trying to collect from you directly, sending the debt to a collection agency instead. Default usually occurs around 120 days past due, though the exact timing varies by issuer.
Can a collection agency garnish my wages without going to court?
No. A collection agency must sue you and win a judgment in court before they can garnish your wages. You have the right to respond to the lawsuit and to defend yourself. If you do not respond, the court may enter a default judgment, which makes garnishment easier for the agency.
If I pay a collection agency, will the late payment come off my credit report?
Paying a collection agency does not remove the late payment from your credit report. The late payment stays for seven years from the original missed payment date. However, paying the collection agency stops them from pursuing further action and may improve your score slightly because the debt is no longer outstanding.