Your credit card agreement requires you to make your credit card payments on time each month. That means sending at least the minimum payment by the due date shown on your credit card statement.
Recent changes to the credit card law say the card issuer must accept your payment as long as it’s received by 5 pm on the due date. If your due date falls on the weekend, a holiday, or another day the card issuer’s payment processing center is closed, then your payment is on time as long as it’s received by the following business day. If you don’t follow the credit card payment rules, there are some consequences.
When you make a late payment, the first thing you’ll notice is a late fee on your credit card statement. Many credit card companies have a tiered late fee system where they charge a late fee between $15 and $39 depending on your credit card balance. The higher your credit card balance, the higher your late fee will be.
If you didn’t send a payment at all during the previous billing cycle, then you’ll have to pay the current and previous minimum payment plus the late fee. Otherwise, you’ll just pay the minimum payment and late fee, which is still more than you would have paid if you’d made your payment on time.
Your credit card issuer will report your late payment to the credit bureau if you’re more than 30 days late on your credit card payment. This late payment will remain on your credit report for seven years. It will also affect your credit score. An isolated late payment won’t affect your credit score as much as several late payments at one time.
Your interest rate can increase if you’re more than 60 days late on your credit card statement. The default interest rate charged when you make a late credit card payment could be as much as 30%. If your credit card issuer raises your interest rate as a result of your late payment, they’re allowed to keep your interest at that higher level for six months. After six months, your interest rate can go back to normal if you’ve continued to make on time payments.
Late credit card payments come with steep consequences. You’ll save more money and your credit score if you make your credit card payments on time.