What Happens if I Stop Paying My Credit Cards?

Life happens, and sometimes you miss a credit card payment. What happens next largely depends on how long the account stays unpaid.

Missing a payment by a few days is very different from going months without paying your credit card bill. The longer an account remains unpaid, the more serious the consequences can become.

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Here's what to expect at each stage of credit card delinquency.

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Stages of Credit Card Delinquency 

1 to 29 Days Late: You May Be Charged a Late Fee

If you've only recently missed a payment, you're still in the best position to limit the damage.

Your credit card issuer may charge a late fee, and interest will continue accruing on any balance you carry. The longer it goes unpaid, the more expensive the balance can become. 

Late payments generally aren't reported to the credit bureaus until they're at least 30 days past due. Bringing the account current before then may help you avoid more serious consequences if you keep missing payments.

30 Days Late: The Missed Payment May Hit Your Credit Report

Many issuers report late payments to the credit bureaus after they are at least 30 days past due.

Up until this point, a missed payment may have been little more than an expensive mistake. Things can get more serious once they start affecting your credit. Because payment history is one of the biggest factors in credit scoring, even a single late payment can have an impact. A lower credit score can make it harder to qualify for new credit and may lead to higher interest rates.

60 Days Late: Interest and Fees Can Continue Adding Up

Consequences can become more serious once an account reaches 60 days past due. In addition to another negative mark on your credit report, some issuers may apply a penalty annual percentage rate (APR) to your account. 

That means the interest rate on your balance could increase, which makes the debt more expensive to repay. Catching up on payments may become more difficult.

90 Days Late: The Account May Move Closer to Collections

By this point, you've fallen behind several billing cycles. Additional late-payment marks may keep appearing on your credit report, and the impact on your credit score may grow as the account falls further past due.

If the balance remains unpaid, the account may move closer to charge-off or collections. Getting caught up at this stage can be much harder than it was a few months earlier.

Around 180 Days Late: Your Account May Be Charged Off

If the debt remains unpaid for roughly six months, the issuer may report the card as defaulted and charge off the account. A charge-off means the lender has written the debt off its books as a loss. However, you're still responsible for repaying what you owe, and the credit card company may sue you for the debt.

The lender may continue trying to collect the debt, transfer the account to a collection agency or sell it to a debt buyer. 

The Best Way To Handle Missed Credit Card Payments

• Contact your credit card issuer: Even if you can’t make a payment, you don't need to wait for the account to become seriously delinquent. Many credit card companies offer hardship programs, payment plans or temporary relief options for borrowers experiencing financial difficulties. 

• Make a payment as soon as you can: The sooner you bring the account current, the better. Even if you can't pay the full balance, making a payment may help limit additional fees, interest charges and damage to your credit.

• Build a plan to pay down the balance: After you’re caught up on payments, focus on reducing the debt. The debt avalanche and debt snowball methods are two popular strategies that can help.

• Be honest about how serious the problem is: Forgetting a payment because you made a mistake is different from not being able to afford the minimum payment month after month. If you're falling behind, you may need more than a simple catch-up on one missed bill. 

• Get help if you need it: A nonprofit credit counseling agency may be able to help you review your finances, create a repayment plan and evaluate options such as a debt management plan. Here’s more about credit card debt help with additional options.

• Explore debt relief options if necessary: f you don't see a realistic path to repayment, consider options such as debt settlement or bankruptcy. Both can have long-term consequences, so understand the trade-offs before moving forward.

Practicing Good Credit Habits

Most people don't wake up one day and suddenly find themselves six months behind on a credit card. It’s usually one payment that doesn’t seem like a big deal, followed by another unexpected expense or a balance that's harder to catch up on than expected.

The earlier you address the problem, the more options you'll usually have. A missed payment that's only a few days late is often much easier to resolve than an account that's already 60, 90 or 180 days past due.

Setting up automatic payments, using payment reminders and reviewing your accounts regularly can help you catch issues before they become more expensive problems. If you think you'll have trouble making a payment, contact your card issuer sooner rather than later.

Key Terms

• Delinquency: A payment that's past its due date; the further past due, the more serious the consequences.

• Late fee: A charge your issuer can add for missing the due date, even if the miss is never reported to the bureaus.

• Penalty APR: A higher interest rate an issuer may apply after a late payment, potentially to your full balance after 60 days.

• Charge-off: When a lender writes the debt off as a loss, typically by 180 days past due — you still owe the balance.

• Collections: When a debt is transferred or sold to a collection agency or debt buyer to pursue repayment.

• Payment history: Your record of on-time and late payments — the single biggest factor in most credit scores.

• Date of first delinquency: The date a missed payment began, which starts the up-to-seven-year reporting clock.

• Hardship program: A temporary issuer arrangement that may lower your rate, waive fees or pause payments during financial difficulty.

Sources

• CFPB / Federal Register: Credit Card Penalty Fees (Regulation Z)

• CFPB: How long does information stay on my credit report?

• CFPB: How to rebuild your credit

• FTC: How To Get Out of Debt

Parts of this article were created with AI assistance. MoneyLion editors reviewed, fact-checked and edited the final version and are responsible for its accuracy.

Emily Gadd, CCC™, contributed to editing this article

Photo credit: primeimages / iStock.com