Late payments result in late fees and credit harm, but there are ways to make it easier to remember to pay your bills.
We’ve all been there: things become hectic, your mind wanders, and you forget to pay your credit card account on time. It is understandable—everyone makes mistakes. Unfortunately, this error could have severe implications.
What happens if you pay your credit card bill late or miss a payment?
- Late fees: In 2019, the Consumer Financial Protection Bureau reported that the average first-time late fee for general-purpose cards was $26. If you have a history of late payments, you may face additional fees. Some card issuers will waive the late fee if this is your first time missing a due date. Call the number on the back of your card to see if this is possible for you.
- Higher interest rates: Some credit cards have a penalty APR, which is more than the interest you would typically pay on a balance. You may be charged a higher rate until you have made on-time payments for multiple months.
- A credit score decrease: If your payment is more than 30 days late, your credit score may suffer. Additionally, late or missed payments can remain on your credit report for up to seven years.
Here are tips for paying your credit card bill on time, every time
Set up alerts
Your credit card issuer will most likely give you with free text and/or email notifications of your bill’s due date. You must log in to your account and opt in to receive this notification; it will not happen automatically. However, with a few simple steps, you can have your preferred reminder sent directly to your phone or inbox each month.
Consider autopay
If you’d want to take a more hands-off approach to managing your credit card account, setting up automatic payments could be the solution. With this service, your credit card company will automatically make your monthly payments from your associated checking account. Again, you must opt in, but it is a simple approach to avoid future late payments.
One word of caution: Autopay is best suited for persons who earn a consistent monthly wage. If your income is inconsistent or you don’t maintain much money in your checking account, you’ll need to keep an eye on your balance to ensure that a credit card autopayment doesn’t cause you to go overdrawn.
Move your due date
If you’re having trouble making your credit card payment on time because the due date doesn’t match the date you’re paid, check in to your account or call your issuer to see if you can move it. Most are flexible with this date, and some even let you choose your own due date online.
Check your account frequently.
If you decide that autopay isn’t for you, start checking your credit card account every day or every other day to reduce the likelihood of missing a billing due date. After all, “payment due” is frequently prominently shown on the screen when it’s time to pay the bill.
You can also make smaller, more frequent payments to your balance. Paying more frequently can help you develop credit because it keeps your overall balance low, lowering your credit utilization. And, if you have credit card debt, interest is calculated based on your average daily balance, so making smaller payments throughout the billing cycle can help you pay less interest overall.
Seek aid if needed.
You may struggle to pay your credit card bill on time because you cannot afford it. This is a difficult and all-too-common predicament to be in, especially if an unforeseen emergency expense causes you to surpass your typical expenditures.
Whether your late payment was due to a one-time expense or recurring financial issues, study a few recent bills to get a feel of where your money goes each month. You might find a few simple strategies to save money, such as canceling a membership you don’t use or renegotiating a fee.
If you’re in a difficult situation due to a job loss, major sickness, or another emergency, you can contact your issuer to explain your situation and find out what hardship programs are available. Knowing how much you can afford to pay each month can help you negotiate terms, such as a temporary reduced interest rate.