What happens if you can't pay your credit card?
Quick insights
- You may have options if you can’t pay a credit card bill, but there will usually be consequences if you don’t.
- Cardmembers should work with their credit card issuer as soon as they know they won’t be able to pay a credit card bill.
- The options and consequences can be different in each situation.
If you can't pay your credit card bill, you may have options. But generally there will still be consequences for not paying on time. To give yourself the best shot at a more positive outcome, cardmembers should work with their card issuer as soon as they know they can't pay a credit card bill.
So what will happen if you don’t pay your credit card bill on time? We’ll find out in this article, including consequences of not paying your bill and options if you can’t make your minimum payment.
What happens if you don't pay your credit card bill?
An ideal situation would involve you realizing you cannot pay your credit card bill before the due date. This timing may give you and your credit card company a wider range of options.
If your due date has not passed
- Calculate how much you might be able to pay. Calculate your income and expenses for the last several weeks. This can be easier if you have set up a budget. Even if you have less than the minimum amount due, know how much you could possibly pay on the due date.
- Contact your credit card company. You'll want to start by explaining your situation and preparing to answer a few questions. Card issuers may ask for different verification information first. However, helpful information for you to explain includes why you cannot pay the minimum amount and the amount you can afford to pay.
If you missed a credit card payment
- Review your email, online account and mailbox. Your card company may notify you of a missed payment when it happens or soon after. Depending on your notification settings and how many days pass, you may receive notices in your email and your physical mailbox. The notices tend to include a specific phone number or instructions to help get your account back on track.
- Call the number on the back of your credit card. Be prepared to explain that you missed a credit card payment and maybe some additional context. You may be transferred to a representative who specializes in helping cardmembers based on their specific situations.
Consequences of not paying your credit card bill
Whether you miss one or several credit card payments, the results may be similar, and some affect you in both the short and the long term. These consequences may include fees, interest charges and an impact to your credit score.
You may be charged fees and penalties
A late payment fee is usually charged after a credit card payment is missed. Some cards limit the fee amount, while other card issuers do not. Late fees are typically added to your credit card's unpaid balance.
To understand the fees and interest you can expect for a late payment, review your card's terms and conditions.
Your unpaid balance will likely accrue interest
Generally, a credit card's unpaid balance accrues interest following the payment due date each month. Based on different terms, programs and situations, it's possible that interest doesn't accrue—or that the accrual date varies.
As interest accrues without a credit card payment, your unpaid balance increases. When interest continues to accrue, a credit card balance can quickly build up.
Your credit can be affected
Your credit score is a three-digit number based on several factors from your credit profile.
Your payment history, which includes your history of monthly payments, makes up about a third of your credit score. So when you miss a credit card payment or submit it late, your payment history changes, and your credit score can go down.
Your account may be charged-off or enter debt collection
Credit cards must be charged off around the time they become 180 days past due, if not earlier. That means the account permanently closes.
After charge-off, an account may be referred to or assigned to a debt collection agency. In some cases, a company will sell charged-off debt.
When an account is past due, prior to charge-off, it is usually in collections but not placed with a debt collection agency. Details about the charge-off and debt collection processes can be different for each situation.
Options if you can't make your minimum payment
Your options vary depending on when you realize you can't make your credit card payment. In general, there are some actions you can take if you realize you can't make your minimum payment before it's due.
Reach out to your credit card issuer
Contacting your credit card issuer can be an important first step when it comes to credit card bills you could miss or have already missed.
Creditors may not be able to help in all situations, but they can be helpful in many instances.
Set up a budget that includes your credit card payment
When you set up a budget, it’ll be specific to your finances. That can provide insight into expenses you have each month, including your credit card bill.
Your budget should help you determine if your current minimum payment is more than you can afford.
You can also use your budget to plan how you might pay down debt.
Request a change of your monthly due date
After some careful calculation, you might find that paying your credit card bill is difficult based on when you receive your income. Usually it's possible to request a change in your credit card's monthly due date to help make it easier to pay on time.
In conclusion
When you don’t pay your credit card bill, there can be several outcomes. These may vary depending on the number of payments missed and the number of accounts that have missed payments. After enough missed payments, the consequences can become more severe.
It's important to remember that there are options to help cardmembers who have missed or are about to miss a credit card payment. Those options may also vary from situation to situation. But contacting your credit card company can be a good step to take. You can also reach out to a credit counseling agency. There should be information available on your statement.
