Your card issuer will report the missed payment to credit bureaus after 30 days
If you miss a credit card payment, nothing happens when ready. Your card issuer gives you a grace period — usually 21 to 25 days after your statement closes — before they charge a late fee. During this window, you can pay without penalty.
Once you pass 30 days late, the issuer reports the delinquency to the three major credit bureaus: Equifax, Experian, and TransUnion. This report stays on your credit report for seven years and damages your credit score. The damage is worst in the first few months, but the late payment continues to affect your score for years.
At 60 days late, you will receive a second notice and a higher late fee. At 90 days late, the card issuer may freeze your account, meaning you cannot make new charges. At 120 days late, the account is typically charged off — the issuer writes it off as a loss and may sell the debt to a collection agency.
Key Takeaways
- Late fees start after your due date passes; credit damage begins after 30 days of non-payment.
- Your interest rate may jump to a penalty rate (often 29.99% or higher) if you miss a payment, even if you have a lower promotional rate.
- After 120 days, the account is usually charged off and sold to a debt collector, who can then pursue you for the full balance.
- Paying the account in full stops collection calls and prevents a lawsuit, though the late payment remains on your credit report.
- If you cannot pay in full, contact your issuer to discuss hardship programs, payment plans, or settlement options before the account reaches 90 days late.
Late fees and interest rate increases happen within days
Your card issuer charges a late fee the moment your payment is due and you do not make it. This fee is capped at $27 for a first offense and $38 for a second offense within six months, though your card's terms may set a lower limit. The fee appears on your next statement.
At the same time, your interest rate may jump to a penalty rate. If you have a promotional rate (0% for 12 months, for example), missing a payment can end that promotion when ready and explore a much higher rate — often 29.99% or the maximum allowed in your state — to your entire balance. This happens even if you pay just one day late.
Interest accrues daily on your balance at this new rate. If you owe $5,000 and your penalty rate is 29.99%, you are paying roughly $4.10 per day in interest alone. This is why paying as soon as you realize you will be late is critical: even a payment a few days overdue stops further interest from accruing at the penalty rate.
Collection calls and letters begin after 60 days
Once you are 60 days late, your card issuer's collections department will contact you by phone and mail. These calls and letters will increase in frequency as you move toward 90 days late. The issuer is required to follow the Fair Debt Collection Practices Act, which means they cannot call before 8 a.m. or after 9 p.m. in your time zone, cannot call your workplace if your employer prohibits it, and must stop calling if you send a written request to cease contact.
The issuer will offer payment plans, hardship programs, or settlement amounts during these calls. These offers are real — the issuer would rather recover some money than charge off the account. If you have any ability to pay, this is the time to negotiate. Once the account is charged off at 120 days, you lose leverage and the debt may pass to a third-party collector with less incentive to work with you.
Charge-off and debt collection happen at 120 days
At 120 days late, your card issuer writes off the account as a loss. This does not erase the debt — it means the issuer has given up trying to collect and is moving it to a debt collector or selling it to a collection agency. The charge-off appears on your credit report and damages your score further, though the damage from the original late payment is already done.
A debt collector now owns or manages the debt and can pursue you for the full balance plus any collection costs. They can call you, send letters, and — if the debt is large enough — file a lawsuit against you. A judgment allows them to garnish your wages or place a lien on your property, depending on your state's laws.
The debt collector's calls are also governed by the Fair Debt Collection Practices Act. You can send a written cease-and-desist letter, though this does not erase the debt — it only stops the calls. The debt itself remains valid and collectible.
Your options if you cannot pay in full
Contact your card issuer before you miss a payment if you know you cannot pay. Most issuers have hardship programs that offer lower interest rates, waived fees, or reduced monthly payments for people facing temporary financial difficulty. These programs are not advertised widely, but they exist. You will need to explain your situation — job loss, medical emergency, divorce — and show that you expect to recover.
If you are already late, you can still negotiate. Offer a lump-sum settlement for less than you owe (often 40 to 60 cents on the dollar) or a payment plan spread over several months. Get any agreement in writing before you pay. Some issuers will also remove the late payment from your credit report if you bring the account current and maintain on-time payments for a set period, though this is not may provide.
If you cannot reach an agreement with the issuer and the account goes to a collector, you can negotiate with the collector using the same approach. A collector who owns the debt has more flexibility to settle than the original issuer. Again, get the settlement amount and terms in writing before you pay.
How a missed payment affects your credit score
A single late payment can drop your credit score by 100 points or more, depending on your starting score and payment history. The damage is steepest in the first few months after the late payment is reported. After six months, the impact begins to fade, but the late payment remains visible on your report for seven years.
During those seven years, the late payment makes it harder to borrow money. Credit card issuers may deny you or offer only high-interest cards. Mortgage and auto lenders will charge you higher rates. Some employers and landlords check credit reports and may reject you based on late payments.
The good news is that the damage decreases over time, especially if you pay all your other bills on time. After two years, the late payment has much less impact on your score. After four years, it is barely visible. After seven years, it falls off your report entirely.
What to do if a debt collector sues you
If a debt collector files a lawsuit, you will receive a summons and complaint. You have a limited time — usually 20 to 30 days depending on your state — to respond. Do not ignore it. If you do not respond, the collector wins by default and can pursue wage garnishment or property liens.
You can respond by filing an answer with the court, admitting or denying the claims. You can also request that the collector prove the debt is yours and that the amount is correct. Many collectors cannot produce the original signed agreement or a clear chain of ownership, especially if the debt has changed hands multiple times. If they cannot prove their case, the judge may dismiss the lawsuit.
If you cannot afford a lawyer, contact your local legal aid office or a nonprofit credit counseling agency. Many offer free or low-cost help with debt collection lawsuits. Some states also have consumer protection laws that allow you to recover attorney fees if you win.
Frequently Asked Questions
Can a credit card company garnish my wages?
Only if they win a lawsuit against you and obtain a judgment. The card issuer themselves cannot garnish your wages — only a debt collector who has sued you and won in court can do this. Wage garnishment rules vary by state; some states protect a portion of your income from garnishment, and some require the collector to follow additional steps before garnishing.
Will paying off a charged-off account remove it from my credit report?
No. Paying a charged-off account stops collection calls and prevents a lawsuit, but the charge-off stays on your report for seven years. However, paying it in full may improve your credit score slightly because it shows the debt is resolved, and some lenders view a paid charge-off more favorably than an unpaid one.
What is a hardship program and how do I ask for one?
A hardship program is an arrangement your card issuer offers to reduce your monthly payment, lower your interest rate, or waive fees if you are facing temporary financial difficulty. Call the customer service number on your card and ask to speak with the hardship department. Be prepared to explain your situation and provide proof of income if asked.
If I settle a debt for less than I owe, do I owe taxes on the forgiven amount?
Possibly. If a creditor forgives more than $600 of your debt, they may issue you a Form 1099-C, which the IRS treats as income. You may owe income tax on the forgiven amount. Consult a tax professional or contact the IRS for guidance on your specific situation.
How long does a debt collector have to sue me?
This depends on your state's statute of limitations, which ranges from three to ten years. Once the statute of limitations expires, the collector can no longer sue you, though the debt itself does not disappear and they can still attempt to collect. Some states have shorter limits for credit card debt; check your state's laws or ask a legal aid attorney.