Do Credit Card Companies Always Report Late Payments?
The most important factor in determining your credit score is making timely payments. If you are focused on improving your credit score or keeping your score in good shape, it is imperative to make at least the minimum payment on time each month.
But what if you miss a payment? Will the information be reportedly right away? Will your score immediately drop? Do credit card companies always report late payments?
Generally, no. Your account will usually not be reported as delinquent until you are at least 30 days late, and the clock starts ticking on the due date—not on the billing date. This means if you pay your balance within 29 days after the due date, your account will likely not be reported as late to the credit bureaus.
Even though your credit score may not suffer from a payment fewer than 30 days late, there will still be consequences. First, you will typically face a late payment fee of $25 for your first late payment or up to $35 if you have missed payments before.
The late fee will never surpass the balance that you owe. For example, if you owe only $10 on your card, the late fee cannot be higher than $10.
Missing a payment may trigger a much higher interest rate on your balance. This can be devastating if you are already in a tight financial situation.
Additionally, many credit card offers are contingent on you making timely payments. Some rewards programs, for example, can take away your rewards points for the month you make the late payment. Similarly, if you currently have a 0% introductory APR offer, the credit card issuer may cancel the introductory rate if you are late on a payment, which means any balances will be charged the ongoing interest rate.
If you do miss a payment, it is be a good idea to contact your creditor. If it is a one-time error, there is a chance they will waive your late payment fee and not further penalize you.
How to Avoid Being Late
There are a number of tools available to make sure you will not be late with your credit card payments. Many credit card issuers offer payment alerts through their mobile apps or websites. When you login to your account through a browser, you can opt to receive an email when your due date is drawing near. Similarly, you can opt-in to these notifications through your issuer’s mobile app. You can choose to be notified of your upcoming due date via email, text, or notification on your mobile device.
Another option is to have your minimum payment automatically deducted from your bank account each month on the due date. This ensures you will never be late with a payment. If you decide you want to pay more than the minimum amount, you can always make an additional payment at any time.
Finally, if you are facing financial difficulty and know you will not be able to make your minimum payment by the due date, it is a good idea to call your creditor. If they know in advance, they may be able to waive any late fees or other penalties that could arise. If you are facing a true financial emergency, your creditor may be able to activate one of their financial hardship plans for you, which can include a lower interest rate, lower minimum monthly payment, waiving fees, or deferred payments.