What Happens When You Stop Making Credit Card Payments? – US News & World Report

  • February 8, 2021
  • By: Greenpath Financial Wellness

GreenPath’s guidance is featured in this article about what happens when late paying on credit card debt.

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For those facing a layoff, a medical emergency or a pile of debt that is more than you can afford, it can be tough to pay credit card bills.

When you stop making credit card payments, you could not only be charged late fees and higher penalty interest rates but also take a hit on your credit. If your unpaid balance lingers for too long, your account may go to collections, and you could be served with a debt collection lawsuit.

The more recent the collection, the more it will hurt your score.

A credit card payment is generally considered late when it’s 30 days past due and won’t end up on your credit report until that point, according to the credit bureau Equifax. Some creditors don’t report late payments until they are 60 days overdue.

Even if a missed payment is not immediately reported to the credit bureaus, you could be hit with a late fee, Equifax notes.

As missed payments pile up, the consequences can become more severe, says Jeff Arevalo, financial wellness expert at GreenPath Financial Wellness.

“If the debts continue to go unpaid, then a person may face charge-offs and even more fees and penalties,” he says. “The cumulative consequence will make it harder for someone to pay the debt off and can potentially push any of his or her financial goals even further into the future.”


If you are having trouble paying off your credit card debt and/or other debt, a debt management plan may be a good option.


What happens when payments are 60 days late?

As you might expect, the financial pain is worse for a credit card payment that is 60 days late than for one that is 30 days overdue. “The later the missed payment becomes, the more it can hurt,” Christensen says.

At this point, you might be subject to more fees and penalties and see your credit score drop even more.

“If one’s credit history is shorter or already in a negative status, the individual may not see quite as large a drop,” Arevalo says. “But the damage cannot be ignored.”

Missing two payments could trigger your card’s penalty interest rate, which can be costly. Although federal law does not limit the interest rates that credit card companies can charge, states may set ceilings, according to the Consumer Financial Protection Bureau.

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