When You Can't Make Your Minimum Credit Card Payment

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When you're unable to make your minimum credit card payment on time, you should pay that minimum amount as quickly as you can after the due date. If you take the right actions, you can avoid hurting your credit rating and maybe even avoid a late fee.

Late Fees

When you can't pay the minimum on your credit card by the due date, the absolute worst thing you can do is just let the bill continue going unpaid. Skipping your minimum payment for a whole month or more will only make it harder to catch up eventually, and you'll have to deal with some not-so-pleasant consequences. Your creditor can take certain actions, like charging a late fee or reporting the late payment to the credit bureaus if your payment goes more than 30 days past due.

The card issuer can charge a late fee of as much as $29 the first time you fail to make a minimum payment on time. If you are late making a payment within the next six months, the issuer can charge you a late fee of as much as $40. 

The issuer of your credit card may not charge you a late fee that is higher than the minimum amount you owe.

Credit Affects

If your card's issuer notifies the credit bureaus—Equifax, Experian, and TransUnion—about your late payment, it will remain in your credit reports for up to seven years. And the late payment will result in a lowering of your credit score by FICO and VantageScore.

Many major credit card issuers, including American Express, will consider your account to be delinquent if you fail to make two consecutive payments and so are over 60 days late. They will definitely notify the credit bureaus about the delinquency, and it will have a greater impact on your credit scores than the single late payment.

Penalty Rate

One missed payment also puts you closer to having your interest rate raised to the highest penalty rate. The credit card issuer can legally apply the penalty annual percentage rate (APR) to your balance if your account becomes delinquent, after two consecutive missed payments.

The issuer must disclose what the penalty APR is—possibly 5 percentage points higher than your previous rate—and how long it will impose the penalty rate—perhaps until you have made 12 consecutive on-time minimum payments or even indefinitely.

As of March 2020, the penalty APR charged by five major issuers of credit cards ranged from 27.24% to 29.99%.

Mailed vs. Online Late Payments

If you mailed in your payment and the due date is a day when the company doesn't receive mail—a Sunday or a U.S. Postal Service holiday—the payment won't be considered late so long as it's received by 5 p.m. the following day. However, if you pay your bill online, you must make the payment by 5 p.m. on the due date or it will be considered late, regardless of the day of the week or holiday status.

Appealing to Your Creditor

If a late minimum payment is unavoidable, you might try calling your card issuer and explaining the situation before the due date. Tell them it's a one-time occurrence and let them know when you'll be able to make your next payment.

Some creditors will extend your due date, waive the late fee, and continue reporting a "current" payment status to credit bureaus. Of course, not every credit card issuer will be sympathetic, but it doesn't hurt to try, especially if you've held the card for a number of years and have never previously missed a payment.

What to Do After a Late Payment

To avoid further harm to your credit, it's very important you not miss a second minimum payment. After you've made a late minimum payment, check your account online or call your creditor to verify that the payment was posted. You should also find out the minimum payment you must make by the next due date and take care to get the payment in on time.

Article Sources

  1. Experian. “When Do Late Payments Get Reported?” Accessed March 19, 2020.

  2. Consumer Financial Protection Bureau. "Why Did My Credit Card Issuer Increase My Late Payment Fee?" Accessed March 19, 2020.

  3. Federal Register, Vol. 84, No. 148. "Rules and Regulations," Page 2. Accessed March 19, 2020.

  4. American Express. "How Late Payments Affect Credit Scores." Accessed March 19, 2020.

  5. Consumer Financial Protection Bureau. "Comment for 1026.60 — Credit and Charge Card Applications and Solicitations." Accessed March 19, 2020.

  6. Consumer Financial Protection Bureau. "When Is My Credit Card Payment Considered to Be Late?" Accessed March 19, 2020.

  7. Consumer Financial Protection Bureau. "My Payment Was Due on a Sunday and I Understood That Meant I Had Until the Next Business Day (Monday) to Pay. I Went Online to My Card Issuer's Website and Made a Payment on Monday, but I Was Charged a Late Fee. Can They Do That?" Accessed March 19, 2020.

  8. myFICO. "What Are the Different Categories of Late Payments and How Does Your FICO Score Consider Late Payments?" Accessed March 19, 2020.