Your card issuer will report the missed payment to credit bureaus, charge you fees and interest, and eventually send your account to collections or sue you
Missing a credit card payment triggers a chain of events that starts within days and can affect your finances for years. Your card issuer will charge a late fee (typically $25 to $40 for the first miss, more for repeat misses), add interest to your balance at your card's APR, and report the miss to the three major credit bureaus — Equifax, Experian, and TransUnion. A single missed payment can lower your credit score by 100 points or more. After 30 days, the miss appears on your credit report. After 90 days, the account is usually considered in default. After 120 to 180 days, the issuer typically sells the debt to a collection agency, which then pursues you for payment.
The longer you don't pay, the worse the consequences compound. Collection agencies can sue you in civil court, and if they win, they can garnish your wages or place a lien on your property — the exact tools depend on your state's laws. A judgment against you can remain on your credit report for seven years. Even if you eventually pay, the damage to your credit score persists, making it harder and more expensive to borrow money for a car, home, or anything else.
Key Takeaways
- Late fees and interest charges begin when ready after you miss a payment, and your card issuer reports the miss to credit bureaus after 30 days.
- After 90 days of non-payment, your account enters default status, and after 120 to 180 days, the debt is typically sold to a collection agency.
- A collection agency can sue you in court, and if they win, they can garnish your wages or place a lien on your property depending on your state.
- A missed payment stays on your credit report for seven years, and a court judgment can remain for seven years or longer depending on your state.
- Contacting your card issuer before you miss a payment to discuss hardship options or a payment plan may prevent the miss from being reported.
How late fees and interest pile up in the first 30 days
Your card issuer charges a late fee the moment your payment is due and you don't make it. Most issuers charge $25 for a first late payment and $35 for subsequent ones within a six-month period, though some cards cap fees at a lower amount. The fee appears on your next statement and is added to your balance.
At the same time, interest accrues on your unpaid balance at your card's annual percentage rate (APR). If your APR is 18 percent and your balance is $5,000, you are being charged roughly $75 per month in interest alone while the account sits unpaid. That interest compounds daily, so the longer you wait, the more you owe beyond the original charge.
Your card issuer does not report the miss to credit bureaus until you are 30 days late. This means if you pay within 30 days of the due date, the miss may not appear on your credit report at all — though the late fee and interest charges remain on your account. After 30 days, the miss is reported to Equifax, Experian, and TransUnion and becomes part of your credit history.
What happens at 60, 90, and 120 days past due
At 60 days past due, your card issuer typically increases your APR. Many cards include a penalty APR clause that kicks in after one or two missed payments, sometimes raising your rate to 29 percent or higher. This means the interest charges accelerate even further. Your issuer also sends you written notice that your account is seriously delinquent and demands payment.
At 90 days past due, your account is formally in default. The credit bureaus now show your account as 90+ days late, which is a major red flag to any lender. Your credit score has likely dropped significantly by this point. Your card issuer may freeze your account, preventing you from making new charges, and may demand that you pay the full balance when ready rather than accepting monthly payments.
At 120 to 180 days past due, most card issuers charge off the account. A charge-off means the issuer has decided the debt is uncollectible and removes it from their active accounts. The charge-off is reported to the credit bureaus and stays on your report for seven years. However, a charge-off does not erase your legal obligation to pay — it straightforward means the issuer has given up trying to collect and is moving the debt elsewhere.
When your debt goes to a collection agency
After the charge-off, the card issuer typically sells your debt to a third-party collection agency for a fraction of what you owe — often 5 to 10 cents on the dollar. The collection agency then owns the debt and has the legal right to pursue you for payment. They will contact you by phone, mail, and sometimes email, demanding payment. Collection calls can be relentless, and the agency may contact your employer, family members, or friends to locate you.
You have rights under the Fair Debt Collection Practices Act (FDCPA). Collection agencies cannot call you before 8 a.m. or after 9 p.m., cannot call you at work if your employer objects, cannot threaten you, cannot use profanity or harassment, and cannot contact you if you send them a written request to stop. If a collection agency violates these rules, you can sue them and potentially recover damages.
Many collection agencies will negotiate a settlement — an agreement to pay less than the full amount owed in exchange for closing the account. If you have the money to offer a lump sum, the agency may accept 30 to 50 percent of the debt. Any settlement should be in writing before you send payment, and you should specify that paying the settlement closes the account and removes the collection from your credit report (though the original missed payment remains).
Lawsuits, wage garnishment, and liens
If you do not pay the collection agency and they believe you have the means to pay, they may file a lawsuit against you in civil court. The collection agency must prove you owe the debt, but they usually have the original credit card agreement and payment history as evidence. If you do not respond to the lawsuit or do not show up in court, the agency wins by default and obtains a judgment against you.
A judgment gives the collection agency the power to garnish your wages. Wage garnishment means the court orders your employer to withhold a portion of your paycheck and send it to the collection agency. The amount varies by state — some states allow garnishment of up to 25 percent of your disposable income, while others cap it lower or prohibit it entirely. A few states, including Texas and South Carolina, prohibit wage garnishment for credit card debt altogether.
In states where wage garnishment is allowed, the collection agency can also place a lien on your property, including your home or car. A lien gives the agency a claim on the asset, meaning if you sell the property, the agency gets paid from the proceeds before you do. A lien can remain on your property for many years, even after the judgment expires.
How missed payments affect your credit score and borrowing
Your payment history makes up 35 percent of your credit score, the largest single factor. A single missed payment can lower your score by 100 points or more, depending on your starting score and the age of the miss. A recent miss hurts more than an older one — a miss from six months ago has less impact than a miss from last month.
The missed payment stays on your credit report for seven years from the date you first missed the payment. After seven years, it falls off automatically. However, a court judgment can remain on your report for seven years in some states and longer in others, and in a few states, a judgment can be renewed indefinitely.
While the miss is on your report, lenders see it and assume you are a higher risk. Credit card issuers may deny you or offer you only secured cards (which require a cash deposit). Auto lenders may charge you a higher interest rate or require a larger down payment. Mortgage lenders may deny you outright or require you to wait several years after the miss before you can borrow. Landlords and employers may also check your credit and use missed payments as a reason to reject your process.
Options if you cannot pay right now
If you know you cannot make your payment, contact your card issuer before the due date. Many issuers offer hardship programs that allow you to pause payments, reduce your interest rate, or set up a payment plan without reporting a miss to the credit bureaus. These programs are not automatic — you have to ask — and they vary by issuer. Some require proof of hardship, such as a job loss letter or medical bill.
If you are already late, you can still contact the issuer and ask about a payment plan or settlement. The issuer may be willing to work with you rather than charge off the account and sell the debt to a collection agency. Any agreement should be in writing before you send payment.
If you cannot afford to pay the full balance, a nonprofit credit counselor can help you understand your options. The National Foundation for Credit Counseling (NFCC) and the Financial Counseling Association (FCA) both offer free or low-cost counseling. A counselor can help you create a budget, negotiate with creditors, or explore a debt management plan, which is a formal agreement to pay your debts over time with reduced interest rates.
Frequently Asked Questions
Will one missed payment ruin my credit forever?
One missed payment will lower your credit score significantly, but it does not ruin your credit permanently. The impact decreases over time, especially if you make all payments on time afterward. After seven years, the miss falls off your credit report entirely. However, the damage is real — you may face higher interest rates or loan denials for several years.
Can a credit card company sue me for a missed payment?
A credit card company itself rarely sues; instead, they sell the debt to a collection agency, which then sues. The collection agency must prove you owe the debt, but they usually have documentation. If you lose the lawsuit, the agency obtains a judgment and can garnish your wages or place a lien on your property, depending on your state's laws.
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 uncollectible and stops trying to collect it themselves. A collection account is when the issuer sells the debt to a third party, which then pursues you. Both appear on your credit report and both damage your score, but a collection account means an outside agency is actively trying to collect from you.
Can I negotiate with a collection agency to remove the account from my credit report?
You can negotiate a settlement for less than the full amount owed, but removing the account from your credit report is rare. Most collection agencies will agree to mark the account as "paid in full" or "settled," which is better than "unpaid," but the account itself typically remains on your report for seven years. Always get any settlement agreement in writing before you pay.
What states don't allow wage garnishment for credit card debt?
Texas, South Carolina, Pennsylvania, and North Carolina prohibit wage garnishment for credit card debt. However, collection agencies in these states can still sue you, place liens on your property, and pursue other collection methods. Even in states that allow garnishment, the amount is limited by federal law to no more than 25 percent of your disposable income.