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How to handle past due credit card accounts

Reach out with a past due payment as quickly as you can.

Cartoon graphics of plastic credit card next to past due bill envelope. Credit: Reviewed / Emily Northrop / Getty Images / chrupka / Jenny On The Moon

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After a challenging year, money has been tight and you’ve fallen behind on payments on a credit card account. You may even feel scared about facing the situation. But the best advice is to reach out to the credit card company, be upfront about your financial situation, and pay the minimum amount due as quickly as possible. The longer you put off paying, the worse things get for your credit. Here are the best ways to manage past-due payments on credit cards.

What to do if your payment is one day late?

If you’ve missed a credit card payment by just one day, it’s unlikely that your credit history will be negatively affected and it won’t take much to get your credit card payment history back on track.

“If you happen to miss your credit card payment due date by a single day, the good news is that it’s almost certain not to impact your credit. The bad news is that there may be a price to pay for missing the all-important deadline. The late fee for the first missed payment can be as high as $28,” says Bruce McClary, senior vice president of membership and communications for National Foundation for Credit Counseling. “To avoid a future repeat, it might help to know that your payment must be received by 5 PM on the scheduled due date in the time zone listed on your billing statement.”

Don’t delay in reaching out to your creditor and be sure to explain the situation to them. Be upfront about your situation and you may be able to get the late fee removed from your account.

“The best step, in this case, is to reach out to the creditor and explain the circumstances that led to the problem. If this is an isolated incident, you might have some success asking for the fee to be waived,” McClary says.

So ask for that late fee to be waived, pay the minimum amount due on your credit card account, and your account will be free and clear again. You’re only one day late. It is easy to correct as long you have the money in your account to cover the amount due. If you don’t have the cash, explain when you will be able to make the payment, maybe after the next paycheck in a couple of weeks. Let the credit card company know when you plan to pay and promptly make the payment when you have the cash. Pay this overdue bill as quickly as you can.

“Pay the bill right away. Do this online or over the phone if possible,” says Melinda Opperman, chief external affairs officer at Credit.org. “If you mail a check, you’re adding time for the payment to be processed, which only makes your payment look even later. Payments are credited the day they are received by the creditor, not the day they were mailed or postmarked.”

Pay an overdue credit card bill as quickly as possible and ideally before the next billing cycle. Provided your payment is less than 29 days late, all you'll likely face is a late fee and the minimum payment amount. A payment that is delayed by 30 days may have a negative impact on your credit.

What to do if your payment is 30 days late?

Ink pen sitting on top of past due bill.
Credit: Reviewed / Getty Images / mphillips007

When you are late on a payment, reach out to the credit card company and tell them why you are late.

The bad news with having a credit card payment 30 days past due is that some creditors will report you as late to the credit reporting agencies. Reported late payments will hurt your credit score and negatively impact your ability to apply for credit, so you’ll want to avoid this if possible.

“Payments can be reported late once they are past the 30-day mark. At that stage, you are considered delinquent. Not all creditors report right after the 30-day stage but they will most likely report a missed payment as the account becomes 60 days late.” McClary says.

Also, at the 30-day mark on a late credit card payment, you may be hit with a higher late fee.

“Credit card issuers are allowed to charge a higher fee of up to $39 for the second missed payment and others that follow,” McClary says.

The best advice if you have a credit card payment that is 30 days late is to reach out to the credit card company and explain why.

“Ask to speak with the hardship department or someone in a position to help you. You’ll want to communicate honestly and directly about your situation and ask what options are available to assist you,” says Tara Alderete, director of enterprise learning at Money Management International. “Be prepared to talk about what caused you to become past due, how much you can realistically afford to pay toward your balance, now and going forward, and when you can resume regular payments, if at all.”

If it’s a temporary setback, let the card company know. But if your financial problems run deep, you may wish to reach out to a credit counseling agency for advice and assistance.

“If the missed payment is the result of temporary financial hardship, it’s best to let your credit card issuer know. If your payment issue is part of something larger and potentially longer lasting, you should connect with a nonprofit credit counseling agency for help overcoming financial obstacles and getting back on track with your payments,” McClary says. “The sooner you reach out for help, the more options you may have.”

What to do if your payment is 60 days late?

Once payment is 60 days late, credit card companies will ramp up their efforts to contact you about missed payments. At this point, they will also charge additional late fees, and if they haven’t already, they will report you as late to the credit reporting agencies.

“Their requests might turn into demands and they may make more frequent attempts to reach you. More late fees are also a likelihood,” McClary says. “From this point forward, you run the risk of having negative information reported to your credit file. The potential damage could make borrowing more costly and difficult in the future.”

As difficult as it may be, reach out to the credit card company and explain your financial information. You should also make a point of explaining why you cannot pay your bill.

“If you’re 60 days late and can’t come up with enough for a single payment, your best move is to reach out to your creditor proactively and see what relief options they offer,” Opperman says. “You don’t want them to think you’re avoiding them, and if you are honest and have a compelling story to tell about your financial hardship, you might get them to offer some kind of forbearance.”

A forbearance could be a pause in your credit card payments or a lowering of your minimum monthly payment. Both could help you get back on your feet. If you haven’t reached out to the credit card company by this point, now is the time.

What to do if your payment is 90 days late?

Person sitting on floor while sitting while reviewing bills and budgeting.
Credit: Reviewed / Emily Northrop / Getty Images / fizkes

Ask for the hardship department, you may qualify for a forbearance, a pausing or lowering of your payment.

When you are 90 days late on a credit card bill, you’ll have more late fees to pay, more damage to your credit rating, and there are also penalty interest rates to worry about.

“Your creditor may increase your interest to what is known as a penalty rate which makes it even more challenging to bring the account back to its current status. Penalty interest rates are commonly 25% or higher,” McClary says. “Also, it is likely that your credit card account has been closed by the creditor to prevent further use. In the absence of any further payment, it’s increasingly likely that your account will be sold to a collection agency.”

Once your credit card account has been turned over to a collection agency, they will reach out to you for payment.

“After the account is charged off to a third-party collection agency, the credit damage is done and the best option may be to try to save up funds to offer the collection agency a settlement, less than the full balance owed, in order to consider the account resolved and prevent future legal action,” says Thomas Nitzsche, senior director of media and brand for Money Management International

If you are having trouble finding the money to pay this collection bill, you may want to sign up for a free counseling session with a nonprofit credit counseling agency. The National Foundation for Credit Counseling, Credit.org, and Money Management International all offer credit and debt help.

These agencies offer budgeting and payment advice and they offer debt management plans. With a debt management plan, creditors may agree to waive late fees and lower interest rates and clients have just one monthly bill to pay.

“Nonprofit credit counseling agencies remain an available resource and could identify repayment strategies that help you turn things around,” McClary says.

What financial steps should you take when you fall behind on a credit card payment?

If you fall behind on a credit card payment, the first step is to stop using the card.

“Whether you’re one day late or 100 days late, you’ve got to stop borrowing,” Opperman says. “Stop using your credit card accounts and don’t do anything to make the situation worse.”

The next step is to review your budget extensively. You’re looking for enough money to pay the minimum payment on your past-due account. Dig deep.

“Go into emergency budget mode. Your goal is to get through the month spending as little as possible while still being able to pay all of your bills,” Opperman says.

Once you find the cash and pay your bill, you’re in the clear. To prevent future missed payments, sign up for automatic payments for your credit card account. Paying the minimum amount by the account’s due date is all it takes to keep your account in good standing.

“Set up automatic payments if you can, to avoid missing future payments. You can set the minimum to be paid automatically, then manually pay anything extra you can afford to bring down your balances,” Opperman says.

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