What Happens When You Miss A Credit Card Payment: A Step-By-Step Guide

**What Happens When You Miss a Credit Card Payment: A Step-by-Step Guide**

Missing a credit card payment can have serious consequences on your credit score and overall financial well-being. In this article, we’ll walk you through the process of what happens when you miss a credit card payment, along with actionable advice to help you avoid similar situations in the future.

**Step 1: The Initial Missed Payment**

When you miss a credit card payment, it’s usually considered a late payment on your statement. You won’t receive any notifications or reminders about the missed payment until the due date has passed. This is because most credit card companies don’t automatically send notifications to customers who have opted out of receiving such messages.

**Step 2: The Payment Processing**

The credit card company will then process the late payment, which may involve a few different steps:

* **Charge-off**: If you’ve been on the verge of bankruptcy or are experiencing financial hardship, your credit card issuer might charge off (write off) your debt. This means they’ll send a notice to collections agencies and other creditors.
* **Settlement**: You can try negotiating with your credit card company to settle for less than the full amount. Be aware that some companies may offer limited settlements or compromise on amounts.
* **Collection agency involvement**: If you haven’t made any payments, collection agencies will be sent to your address.

**Step 3: The Impact on Your Credit Score**

Missed payments can significantly lower your credit score. Here’s a rough estimate of the impact:

* Late payments (35-60 days): -50 points
* Default or charge-off (60+ days): -100 points

**Real Examples and APR Figures**

To give you an idea of how serious missed payments can be, consider this example:

| Payment Date | Credit Card Company | Late Payment Penalty |
| — | — | — |
| 2023-02-15 | Standard American Express | $25 late fee |

As for the APR figures, here’s a general breakdown:

* **Variable APRs**: If your credit card has a variable APR (the rate that changes over time), you might face an interest charge on the missed payment. For example:
* Chase Sapphire Preferred: 14.99% – 24.49% (variable)
* Citi Simplicity Card: 17.74% – 25.74% (variable