None of the individuals is perfect. One might have gone on a vacation or might have been over-occupied with work and in that hustle, it is common to not remember the credit card payment due date. Or there can be another reason that you may not have enough amount in your account to pay your credit card bills. A missed payment will turn out into a costly blunder mixing both late payment fees and interest charges thereon.

What Happens If a Credit Card Payment is Missed?

Surely, nobody would like to miss a credit card payment, but still, if it happens, individuals can still undertake a few steps to minimize the effects which otherwise they would have to face because of missing credit card payment. As the overdue balance might become a very heavy amount, it is very important to clear the credit card bills as early as possible. Missing a credit card payment is quite a big deal and its impacts can be very dangerous. Hence, in this article, we will discuss the scenarios that credit cardholders will have to face in case of missing credit card payments.

What Happens When You Miss A Credit Card Payment

The effects of missing a credit card payment depend on actually how late are you in submitting your credit card bill. If you forget even to pay the minimum due on your credit card, the following are the consequences that you will have to face –

Interest Charges

When a credit card payment is missed by an individual, either intentionally or unintentionally, the bill amount will attract interest charges. If you carefully read the terms and conditions page that comes along with the credit card welcome kit, it clearly mentions that interest potion will be charged to the individual by the bank if any credit card bill is not submitted by the due date. Generally, interest rates differ from bank to bank and card to card but on average, you are generally charged with a 3% – 3.5% interest per month.

Late Payment Fees

A late payment fee is a fee that credit card issuers charge from credit cardholders when a cardholder does not make the credit card payment by the due date of the billing cycle. If you miss a payment or make a late payment, the late fee will show up on your next bill. Therefore, when the next bill is generated, it will be sum total of the last bill, plus the interest charges, plus the late payment fee, and the amount of any further purchases made in the current billing cycle.

Impacts Credit Score

Another significant impact that missed credit card payments have is that it lowers your credit score. A credit score is a very important 3-digit number that plays a very important role in determining the credibility of an individual. Credit card issuing companies check this score thoroughly before granting any type of credit to individuals. Credit repayment history plays a very important role in determining your credit score. It contributes 35% to your credit score. Therefore, any delay in payment of a credit card bill or missed payments will lead to a decline in a credit score.

Things To Do To Avoid Missing Credit Card Payments

Some of the following steps can be taken to avoid missing credit card payments –

Set up Auto Pay

Credit card issuing companies provide you with an option to set up an autopay option to avoid late payments. This autopay option can be set up either for the minimum due amount, total statement amount, and also for some other amount as well. This auto-pay option can be set up to avoid interest charges, but if paying the full amount is not possible, you should try to pay at least the minimum due amount of the total billing amount.

Set up Payment Reminders

If cardholders do not wish to set up an auto-pay option, you can set up payment reminders so that you do not skip paying the credit card bills. You can either opt for an option from the bank to send you regular SMS on your registered mobile number or E-Mails to your registered mail id regarding the payment date of your credit card bill. With the help of this, you will be able to get regular reminders to pay your credit card bills on time.

Bottom Line

If you are of the notion that you are that one person who misses their credit card payments, then this habit of yours will have multiple negative effects not only financially but on your credit score as well. Once your credit score goes down, it takes years to mend it. Therefore, you should be very cautious regarding the credit card bill payment dates and you can also follow certain steps such as setting up autopay, constant reminders, etc so that you do not miss any credit card bill payment date and hence no negative impact is placed on your credit score.

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