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What Happens If You Don’t Pay Your Credit Card?

Jerry Brown • January 18, 2024

Not paying at least the minimum balance on your credit card can cause harm to your finances. Credit card companies may charge you late fees, increase your card’s interest rate, or even take you to court.

However, on a positive note, issuers may be willing to work with you if you’re having trouble making payments. Here’s a deeper look at what happens when you don’t pay your credit card bill and some tips for getting back on track after a missed credit card payment.

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4 consequences of not paying your credit card balance

Missing your credit card payment by a few days probably won’t affect your credit. Credit card companies typically start reporting late payments after 30 days.1 However, a credit card issuer may still charge you a late fee. After 60 days of non-payment, you may face other consequences like higher interest rates.2

Here’s a closer look at what could happen if you don’t pay your credit card bill.

1. A drop in your credit score

When your credit card payment is at least 30 days past due, your issuer can report your late payment to the three  credit bureaus – Equifax, Experian, and TransUnion.1 Once the negative remark is added to your credit profile, it can lower your credit score.

A lower score can make qualifying for the best rates on car loans, mortgages, and other credit products more challenging.

2. Fees and debt rates

Credit card issuers generally charge a late fee for missed credit card payments. The amount varies by issuer but typically ranges from $25 to $40.3

Plus, if your payment is 60 days late, a creditor may increase your card’s annual percentage rate (APR) – the amount you may pay each year in interest and fees if you don’t pay your statement balance in full each month.

3. Your account will be charged off

Not paying your credit card bill can also lead to a credit card issuer “charging off” your account, meaning they close the account and likely send your debt to a debt collector.

A charge-off typically happens after your payment becomes four to six months past due. If a credit card company reports a charge-off to the credit bureaus, it can cause even more damage to your credit.4

4. Lawsuits

A credit card company may decide to sue you after six months of non-payment. A debt collection agency or debt collector could also sue you.

Credit card issuers and debt collectors can even garnish your wages to satisfy the outstanding debt.

That said, credit card issuers usually try to work with you before taking matters to court.5

7 steps to take if you have missed credit card payments

Although missing a credit card payment can negatively impact you, there are several steps you can take to get your finances back on track.

  • Stop using your credit card: If possible, don’t use your credit card to make additional purchases. Some issuers allow you to temporarily freeze or lock your credit card when you log into your account.
  • Do an extensive review of your income and expenses: Plug your monthly income and expenses into a spreadsheet or jot them down on paper to see where your money is going.
  • Consider moving your payment due date: If more flexibility would help you pay your credit card on time, ask your credit card company to adjust your due date.
  • Ask for credit card relief programs: Contact your issuer to discuss your repayment options if you can’t afford to your credit card bill. Some credit card companies may be willing to offer relief in the form of a lower interest rate or monthly payment.6
  • Set automatic payments: Enroll in autopay to avoid missing a payment. Make sure you have enough money in your account each month to avoid potential overdraft fees.
  • Make your payment a priority: If you missed a credit card payment because you’re more focused on other financial goals or expenses, consider making at least the minimum payment on your credit card a main priority.
  • Set a budget to pay your debt: If you haven’t already done so, create a budget to identify some expenses you can trim to free up cash to put toward paying your credit cards. You can use a spreadsheet or budgeting app.
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Are minimum credit card payments a good option for missed payments?

Making the minimum payments on your credit card may be an excellent option in the short term since it can help you avoid late fees. But doing so isn’t ideal because it can keep you in debt longer, and you’ll likely pay more interest.

If you can afford it, paying your statement balance in full each month – the amount shown on your monthly billing statement – can help you avoid paying interest.

What happens if you never pay your credit card?

Never paying your credit card isn’t recommended, but it can lead to severe consequences.

After your credit card bill becomes 120 to 180 days past due, debt collectors might contact you to get you to pay your credit card balance. But there are plenty of ways to consolidate your debt before the consequences of late payments become more serious.

Consolidating your debt involves swapping out your existing debt with a new loan that hopefully has more favorable rates and terms. Two popular ways to consolidate debt are to take out a personal loan or balance transfer credit card.

Manage your debt and protect your credit score

Paying your bills on time is crucial for maintaining or rebuilding good credit. Keeping up with your credit card payments can also help you avoid severe consequences, like late fees, higher interest rates, and even a lawsuit.

If you’re having trouble making your payments, contact your issuer to discuss potential debt relief options like a lower interest rate. For additional tips, read our strategies on how to pay off your credit card debt.

FAQs

Is it true that your credit is clear after seven years?

Negative marks, such as late payments and charge-offs, usually fall off your credit reports after seven years. Bankruptcies can remain on your credit reports for seven to 10 years, depending on which type you file.

The good news is that positive information from credit accounts stays on your credit report for as long as the account is opened. Closed accounts that are paid as promised stay on your credit file for up to 10 years.7

Can I cancel a credit card if I can’t pay it?

Yes, you can close a credit card with an outstanding balance. Doing so might help you avoid adding more debt to the card.8 However, credit card issuers will still expect you to repay your unpaid balance.

Can you go to jail for credit card debt?

Although not paying your credit card has serious consequences, going to jail isn’t one of them.9 That said, if a court orders you to appear at a hearing or make a payment on your credit cards, try to do so because it can issue a warrant for your arrest for failing to follow orders, depending on where you live.10

Is it better to let credit cards go to collections?

No, it’s best to figure out a way to pay your credit cards first before an issuer sends your debt to collections. That way, you can avoid the serious harm a collection can have on your credit.

How fast will a credit card issuer sue you for non-payment?

Generally speaking, a credit card issuer may sue you after six months of no payments.5 But the company may be willing to work with you if you’re having trouble making payments before it gets to that point.

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1 Information from Equifax's "When late payments show up on credit reports?" as of January 9, 2024: https://www.equifax.com/personal/education/credit-cards/articles/-/learn/when-late-credit-card-payments-post/

2 Information from the Federal Reserve's "Credit card rules" as of January 14, 2025: https://www.federalreserve.gov/consumerinfo/wyntk/wyntk_ccrules.pdf

3 Information from Federal Register's "Credit card penalty fee's (Regulation Z)" as of January 10, 2024: https://www.federalregister.gov/documents/2023/03/29/2023-02393/credit-card-penalty-fees-regulation-z

4 Information from Equifax's "Charge Off Faqs" as of January 10, 2024: https://www.equifax.com/personal/education/credit/report/articles/-/learn/charge-offs-faq/

5 Information from FindLaw's "What should I do if I've been sued for debt"" as of January 9, 2024: https://www.findlaw.com/bankruptcy/debt-relief/what-should-i-do-if-i-ve-been-sued-for-debt.html

6 Information from Equifax's "How to negotiate debt with your lenders" as of January 10, 2024: https://www.equifax.com/personal/education/debt-management/articles/-/learn/negotiate-debt-with-lenders/

7 Information from Equifax's "How long does information stay on my Equifax credit report?" as of January 9, 2024: https://www.equifax.com/personal/education/credit/report/articles/-/learn/how-long-does-information-stay-on-credit-report/

8 Information from Experian's "Can you close a card with a balance?" as of Janurary 14, 2024": https://www.experian.com/blogs/ask-experian/can-i-close-credit-card-with-balance/

9 Information from Nolo's "The new bill collector tactic: jail time" as of January 14, 2024

10 Information from Nolo's “What can creditors do if you don't pay?” as of January 9, 2024: https://www.nolo.com/legal-encyclopedia/free-books/small-business-book/chapter4-4.html#

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