Your credit score drops when ready, your interest charges keep growing, and the card issuer will eventually send your account to collections
Stopping credit card payments does not make the debt disappear. Within 30 days of a missed payment, the card issuer reports it to the three credit bureaus — Equifax, Experian, and TransUnion. Your credit score typically falls 100 to 150 points on the first miss, and continues to drop with each month you do not pay. After 180 days (six months) of no payment, the card issuer usually closes the account and sells the debt to a collections agency, which then pursues you for the full balance plus collection fees and interest.
The debt itself does not expire during this time. Interest and late fees continue to accrue on the unpaid balance. A collections agency can sue you in court, and if they win, they can garnish your wages or place a lien on your property — the exact tools available depend on your state and the size of the debt. Even after you stop hearing from collectors, the missed payments remain on your credit report for seven years from the date of first delinquency, making it harder to borrow money, rent an apartment, or sometimes even get hired.
Key Takeaways
- A missed payment is reported to credit bureaus within 30 days and typically lowers your score by 100 to 150 points on the first miss.
- After 180 days without payment, the card issuer usually closes your account and sells the debt to a collections agency that can sue you.
- Interest and late fees continue to grow on the unpaid balance, and a court judgment can result in wage garnishment or property liens depending on your state.
- Missed payments stay on your credit report for seven years, even if you eventually pay the debt in full.
- If you cannot pay in full, contacting the card issuer or a nonprofit credit counselor before you miss a payment gives you more options than waiting.
What happens in the first 30 to 90 days
The card issuer's first move is to contact you — usually by phone, email, and mail — asking you to bring the account current. Most cards charge a late fee (typically $25 to $40) on the first missed payment. If you pay within 30 days, the late fee is the main cost, though the missed payment itself may still be reported to the bureaus depending on the card issuer's policy.
After 60 days, the late fee may increase and the card issuer may raise your interest rate to the penalty rate, which can be 29% or higher. At 90 days, the account is considered seriously delinquent. The card issuer's collections department intensifies contact attempts. You may receive calls multiple times per day. At this stage, the card issuer is also deciding whether to pursue legal action or sell the debt.
The shift to collections and legal action
Once an account reaches 180 days past due, most card issuers charge off the account — meaning they remove it from their active portfolio and write it off as a loss on their books. This does not erase your obligation to pay. Instead, the card issuer typically sells the debt to a third-party collections agency for a fraction of what you owe. The collections agency then owns the right to pursue you for the full balance, including collection costs and interest.
A collections agency can file a lawsuit against you in civil court. If they win, the court issues a judgment against you. With a judgment in hand, the agency can garnish your wages (taking a portion of each paycheck), place a lien on your home or car, or freeze your bank accounts — the specific tools vary by state. Some states limit how much can be garnished; others allow the agency to take a larger percentage. A judgment typically remains enforceable for 10 to 20 years depending on your state, meaning the agency can pursue collection long after the initial debt was charged off.
How your credit report is affected
The first missed payment appears on your credit report within 30 days and is labeled as 30 days late. Each additional month of non-payment adds another entry: 60 days late, 90 days late, and so on. Once the account is charged off at 180 days, that status also appears on your report. If a collections agency sues and wins, a judgment appears as well.
All of these negative marks damage your credit score, but the damage is not uniform. The first missed payment typically causes the largest drop. Subsequent months of delinquency cause additional harm, but at a slower rate. A charge-off is a serious mark that lenders view as a sign of financial distress. A judgment is even worse — many lenders will not approve you for credit if a judgment is active on your report.
The good news is that the impact weakens over time. After two years, the missed payments have less weight in your score calculation. After seven years from the date of first delinquency, the entire account (including the charge-off) falls off your credit report automatically. However, a judgment may remain longer depending on your state.
State-by-state differences in collections and garnishment
The tools available to a collections agency depend on where you live. Some states are debtor-friendly and limit wage garnishment to 25% of your disposable income or a specific dollar amount per week. Other states allow higher percentages. A few states prohibit wage garnishment entirely for consumer debts, though the agency can still pursue other collection methods like bank account freezes or property liens.
The statute of limitations — the time window during which a collections agency can sue you — also varies by state, typically ranging from three to six years from the date of last payment or last charge. Once the statute of limitations expires, the agency can no longer sue you, though they may still attempt to collect and the debt remains on your credit report until seven years have passed.
Because these rules differ significantly, it is worth learning your state's specific rules before you stop paying. Your state attorney general's office or a nonprofit credit counselor can tell you what protections explore where you live.
Options before you miss a payment
If you see a missed payment coming, contact the card issuer before the due date passes. Many issuers offer hardship programs that temporarily lower your interest rate, reduce your monthly payment, or pause interest accrual for a set period. These programs are not advertised widely, but they exist, and the card issuer is more likely to offer one if you call proactively rather than after you have already missed a payment.
You can also ask about a payment plan or a one-time fee waiver if you have been a good customer. Some issuers will work with you if you explain your situation honestly. If you are struggling with multiple debts, a nonprofit credit counselor (through the National Foundation for Credit Counseling or a similar organization) can help you create a budget or negotiate with creditors on your behalf. Credit counseling is free or low-cost and does not hurt your credit score.
Debt consolidation or a balance transfer to a lower-interest card are options if you have decent credit and can may have access to. These do not erase the debt but can lower your monthly payment or interest rate, making it more manageable. If your debt is very large relative to your income, bankruptcy may be an option, though it has serious long-term consequences and should only be considered with the help of a bankruptcy attorney.
What you owe after a charge-off or judgment
A common misconception is that a charge-off means you no longer owe the money. It does not. A charge-off is an accounting action by the card issuer; it means they have given up trying to collect and have written the debt off as a loss. You still owe the full amount, plus any interest and fees that have accrued. The debt straightforward moves to a collections agency or remains with the original creditor, depending on the card issuer's policy.
If a collections agency sues and wins a judgment, you owe the judgment amount, which includes the original debt plus court costs and sometimes attorney fees. The judgment accrues interest at a rate set by your state (typically 4% to 10% per year), so the amount you owe grows even after the judgment is issued.
If you eventually pay a collections agency, ask them to provide a written settlement agreement before you pay. Some agencies will agree to remove the collection account from your credit report in exchange for payment (called "pay to delete"), though this is not may provide and some agencies refuse. Even if the collection account remains on your report, paying it in full stops the agency from pursuing further collection action and stops wage garnishment or other enforcement.
Frequently Asked Questions
How long before a credit card company sues me?
Most card issuers wait until an account is 120 to 180 days past due before filing a lawsuit. Some wait longer. The exact timing depends on the card issuer's internal policy and the size of the debt. Smaller debts are less likely to be sued on because the cost of litigation is high relative to the amount owed.
Can I go to jail for not paying a credit card?
No. Debtors' prisons do not exist in the United States. A collections agency cannot have you arrested or jailed for owing a credit card debt. However, if you ignore a court order or fail to appear in court after being sued, you could face contempt of court charges, which can result in jail time. The key is to respond to any lawsuit or court notice you receive.
Will my bank account be frozen if I stop paying?
Not automatically. A collections agency must first sue you and win a judgment, then use that judgment to freeze your account. This process takes months at minimum. Once a judgment is in place, the agency can freeze your account, but they must follow your state's procedures for doing so, which usually include providing notice. Some states protect a certain amount of money in your account (called an exemption) from being frozen.
What if I pay the debt after seven years?
Paying the debt does not remove it from your credit report if seven years have already passed — it falls off automatically. However, if you pay before seven years have elapsed, the account status may change to "paid" or "settled," which is better for your credit score than "unpaid." Paying also stops the collections agency from pursuing further action against you.
Can a collections agency contact my employer or family members?
A collections agency can contact your employer to verify your employment, but they cannot tell your employer about the debt or ask them to pressure you to pay. They can contact family members to locate you, but they cannot discuss the debt with them. If a collector violates these rules, you can file a complaint with the Consumer Financial Protection Bureau or sue under the Fair Debt Collection Practices Act.