Your card issuer will report the missed payment to credit bureaus, charge you fees, and eventually close your account or send the debt to a collection agency
Missing a credit card payment triggers a chain of events that starts within days and can affect your finances for years. The first thing that happens is visible: your card issuer reports the late payment to Equifax, Experian, and TransUnion — the three major credit bureaus. That report lands on your credit report and when ready lowers your credit score. At the same time, the card issuer charges you a late fee (usually $25 to $40 for a first missed payment) and may raise your interest rate to a penalty rate, which can be as high as 29.99% depending on your card's terms.
If you miss a payment by 30 days, the damage deepens. The late payment becomes part of your permanent credit history for seven years. Your score drops further. If you miss a payment by 60 days, your card issuer may freeze your account, meaning you cannot use the card even if you want to pay. At 90 days past due, the account is typically charged off — the issuer writes it off as a loss on their books and may sell the debt to a third-party collection agency. From that point forward, a debt collector, not your card issuer, owns the right to pursue you for payment.
Key Takeaways
- A missed payment is reported to credit bureaus within 30 days and stays on your credit report for seven years, lowering your score when ready.
- Late fees and penalty interest rates kick in right away, making the debt grow faster even if you do not use the card.
- After 90 days of non-payment, your account is typically charged off and sold to a collection agency, which then pursues you for the full balance.
- Debt collectors can sue you in court and, if they win, garnish your wages or place a lien on your property, depending on your state's laws.
- Stopping payment does not erase the debt — it only delays the problem and makes it more expensive.
How late fees and interest rates work against you
The moment you miss a payment, your card issuer charges a late fee. For the first missed payment, this is usually $25 to $40. If you miss another payment 30 days later, they charge you again — and the second fee is often higher, up to $40. These fees are added to your balance, so you now owe more than you did before.
At the same time, your interest rate changes. Most credit cards have a standard purchase rate (often 15% to 25%), but your card agreement includes a penalty rate — the rate they can charge if you miss a payment. This penalty rate can be as high as 29.99% and applies to your entire balance, not just new charges. If you owed $5,000 at 18% interest and your rate jumps to 29.99%, you are now paying roughly $125 more per month in interest alone, even if you make no new charges. The debt grows faster, making it harder to catch up.
What happens at 30, 60, and 90 days past due
The credit reporting system divides missed payments into stages, and each stage has real consequences. At 30 days past due, your card issuer reports the late payment to the credit bureaus. Your credit score drops — the size of the drop depends on your current score and payment history, but a first late payment typically costs 100 to 150 points. You may also receive a phone call or letter from the card issuer's collections department asking you to pay.
At 60 days past due, the situation worsens. Your card is usually frozen, meaning you cannot make new charges. The late payment is now visible to anyone who pulls your credit report, including landlords, employers (in some cases), and other lenders. If you are trying to get a mortgage, a car loan, or even a rental apartment, this late payment will be a barrier.
At 90 days past due, your account is charged off. This does not mean the debt disappears — it means your card issuer has given up on collecting from you directly and has written the account off as a loss. The debt is then typically sold to a third-party debt collection agency for pennies on the dollar. From this point forward, the collection agency owns the debt and has the legal right to contact you and pursue payment. The charge-off itself stays on your credit report for seven years.
How debt collection agencies pursue unpaid credit card debt
Once a collection agency owns your debt, they have several tools to pursue payment. The most common is phone calls and letters. By law, they cannot call before 8 a.m. or after 9 p.m., cannot call your workplace if your employer forbids it, and cannot harass you or threaten you. If you tell them in writing to stop contacting you, they must stop — but stopping contact does not erase the debt.
If you do not pay and the collection agency decides the debt is worth pursuing, they can file a lawsuit against you in civil court. If they win — and they often do, especially if you do not show up to defend yourself — the court issues a judgment against you. A judgment is a court order saying you owe the money. At that point, the collection agency can use the judgment to garnish your wages (take money directly from your paycheck) or place a lien on your property (claim against your house or car). The rules for garnishment and liens vary by state, but in most states, a collection agency can garnish 10% to 25% of your disposable income.
The impact on your credit score and borrowing power
A single missed credit card payment can lower your credit score by 100 to 150 points, depending on your starting score and credit history. If your score was 750 (considered very good), it might drop to 600 or lower. A score in that range makes it nearly impossible to get approved for a mortgage, car loan, or new credit card at a reasonable rate. If you do get approved, you will pay a higher interest rate — sometimes 2% to 5% higher than someone with good credit.
The late payment stays on your credit report for seven years from the date you first missed the payment. This does not mean your score stays low for seven years — it gradually improves as you make on-time payments and as the late payment gets older. But for the first two to three years, the damage is significant. After three years, the impact starts to fade, but the late payment is still visible to lenders.
What you can do if you have missed a payment
If you have missed a payment but the account has not yet been charged off (usually within the first 90 days), contact your card issuer when ready. Explain what happened and ask if they will accept a payment to bring the account current. Many card issuers will work with you, especially if this is your first missed payment. Paying the full past-due amount stops the clock on late fees and may prevent the account from being charged off.
If you cannot pay the full amount at once, ask about a payment plan. Some card issuers will let you pay the past-due amount over two or three months instead of all at once. This is not a formal program — it is a negotiation — but it is worth asking. Get any agreement in writing before you send money.
If the account has already been charged off or sold to a collection agency, you have different options. You can negotiate a settlement with the collection agency — offering to pay a portion of the debt (often 30% to 60% of the balance) in exchange for them removing the account from your credit report or marking it as "settled." Get any settlement offer in writing before you pay. You can also straightforward wait out the statute of limitations, which varies by state (usually three to six years). After the statute of limitations expires, the collection agency can no longer sue you, though the debt itself does not disappear and the account may still appear on your credit report.
How to avoid this situation in the future
The simplest way to avoid missed payments is to set up automatic payments. Most card issuers let you set up automatic payment for the minimum payment, the full balance, or a fixed amount of your choice. Automatic payments happen on a date you choose, so you never have to remember. If you are worried about overdrafting your bank account, set the payment for a few days after you typically get paid.
If automatic payments are not an option, set a phone reminder or calendar alert for a few days before your payment due date. Write the due date on a calendar you see every day. The goal is to make the payment before the due date, not on the due date — this gives you a buffer in case of mail delays or processing delays.
If you are struggling to make minimum payments, that is a sign you are carrying too much credit card debt. Consider paying down the balance or looking into a debt consolidation loan or balance transfer card, which can lower your interest rate and make payments more manageable. The longer you wait, the more interest you pay and the harder it becomes to catch up.
Frequently Asked Questions
Can a credit card company sue me for not paying?
Yes. If your account is charged off and sold to a collection agency, the agency can file a lawsuit against you in civil court. If they win, they get a judgment that allows them to garnish your wages or place a lien on your property. The rules vary by state, but in most places, they can take 10% to 25% of your paycheck.
Will my credit score ever recover after a missed payment?
Yes, but it takes time. The late payment stays on your report for seven years, but its impact fades as you make on-time payments and as the late payment gets older. After two to three years of on-time payments, your score usually recovers significantly. After seven years, the late payment falls off your report entirely.
What is the difference between a charge-off and a collection account?
A charge-off is when your card issuer writes off the debt as a loss on their books, usually after 90 days of non-payment. A collection account is when that debt is sold to a third-party collection agency. Both appear on your credit report, and both damage your score. The collection agency then owns the right to pursue you for payment.
Can I negotiate with a collection agency to pay less than I owe?
Yes. Collection agencies often settle for less than the full balance — typically 30% to 60% of what you owe. Before you offer money, get the settlement terms in writing. Ask them to remove the account from your credit report as part of the deal, though not all agencies will agree to this.
What happens if I ignore a collection agency?
If you ignore them long enough, they may file a lawsuit against you. If they win and you still do not pay, they can garnish your wages or place a lien on your property. The debt does not go away — it only gets more expensive and more damaging to your finances.