At O1ne Mortgage, we prioritize consumer credit and finance education. Understanding the consequences of missing a credit card payment is crucial for maintaining financial health. In this article, we will explore the potential repercussions and provide actionable steps to manage your finances effectively. For any mortgage service needs, call us at 213-732-3074.

You Could Be Charged a Late Fee

Missing a credit card payment by even one day can result in a late fee. The Consumer Financial Protection Bureau (CFPB) capped credit card late fees at $8 in March 2024, but this ruling is currently in legal limbo. Depending on your card’s terms, late fees can vary, with some cards charging up to $30 for an initial late payment and up to $41 for subsequent late payments within six billing cycles.

You Can Lose Promotional APRs

Missing a payment can lead to the immediate loss of any promotional annual percentage rates (APRs) you may have. This means that if you had a temporary lower APR or an introductory 0% APR on purchases or balance transfers, the standard APR will kick in once you miss a payment.

You Can Incur a Penalty APR

If you miss a payment, a higher penalty APR might replace your standard APR. Initially, this higher rate applies only to new purchases, but if you fall 60 days behind, it can apply to your current balance as well. This can quickly increase your debt due to daily compounding interest.

Your Account May Be Sent to Collections

If your account remains unpaid for around 180 days, the credit card issuer may charge off your account and send or sell it to a collection agency. This can significantly increase your total balance due to accumulated late fees and interest charges.

Your Credit Score May Take a Hit

Late payments can be reported to credit bureaus once your account is 30 days past due, potentially staying on your credit report for up to seven years. This can lead to a significant drop in your credit score, especially if you have a good credit history. Subsequent late payments and charge-offs can further damage your credit.

Your Creditor May File Suit Against You

Creditors or debt collectors can sue you for unpaid balances, including accrued fees and interest. If they win, they may garnish your wages or bank account or place a lien against your property. Ignoring a lawsuit can result in a default judgment in favor of the creditor.

What to Do if You’ve Missed a Payment

Taking quick action can help limit the negative consequences of a missed payment:

• Contact your credit card company: If you can’t afford the bill due to a temporary setback, ask if they offer any hardship options.
• Bring the account current: Try to make the payment and then request a refund for any late fees or interest charges.
• Set up alerts and autopay: Use alerts and autopay to avoid missing future payments.
• Contact a nonprofit credit counseling agency: A credit counselor can help you set a budget or get on a debt management plan.

Set Yourself Up for Success

Missing credit card payments can lead to expensive and credit-damaging consequences. However, making at least the minimum payment can keep your account current and help you avoid fees and penalty APRs. Tracking your income and expenses with a budget can also help you manage your finances better.

For expert mortgage services, contact O1ne Mortgage at 213-732-3074. Our team is here to help you navigate your financial journey with confidence.