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What happens if you can't pay your credit card?

minute read

    You may have options if you can't pay a credit card bill, and there are usually consequences if you don't. In general, cardmembers should work with the credit card issuer as soon as they know they can't pay a credit card bill. The options and consequences can be different for every situation, but when you realize you cannot pay your credit card bill is important.

    Here's what we'll cover in this article:

    • What happens if you don't pay your credit card bill?
    • Consequences of not paying your credit card bill.
    • 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 receiving fees, interest charges, and an impact on your credit score.

    You may receive fees and penalties

    A late payment fee is usually charged after a credit card payment is missed. Some cards limit the amount of the fee while others 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 3-digit number based on several factors of your credit profile. A significant factor is your credit history, which includes your history of monthly payments. When you miss a credit card payment or submit it late, your payment history changes, and your credit score can decrease. Payment history actually represents about a third of your credit score.

    Your account may charge-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 becomes permanently closed. After charge-off, an account may be referred 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. We won't give many details about the charge-off and debt collection processes here, as they 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 is due.

    Reach out to your credit card issuer

    Contacting your credit card issuer is an important initial step to take when it comes to credit card bills you may miss or already have missed. In general, creditors may not be able to help in all situations, but they can be helpful in many instances.

    At Chase, we want customers to contact us once they realize they won't be able to make a payment, so we can discuss how we can help.

    Set up a budget that includes your credit card payment

    When you set up a budget, it will 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 employment or other income. Usually it's possible to request a change in your credit card's monthly due date. Even a change of several days could improve your ability to pay your credit card bill on time.

    In conclusion

    There are several outcomes of not paying your credit card bill, and they're all relatively serious. The consequences may vary depending on the number of payments missed and the number of accounts that have missed payments. After enough missed payments, the consequences become more serious.

    Despite all this talk of consequences, it's important to remember that several options exist to help cardmembers who have missed or are about to miss a credit card payment. Those options also vary from situation to situation. However, contacting your credit card company is typically the best first step to take.

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