Is It Ever OK to Be Late on Your Credit Card Payments?

Credit cards are jam-packed with perks, like cash back rebates and free shopping protections. But they also have their fair share of risks, such as high purchase APRs and late fees. Most credit card users can avoid these risks by paying their balance in full and on time each month, but what happens if you can't make a credit card payment on time? Is it ever OK to be late?

Generally speaking, it's prudent to always stay current on your credit card payments, as being late could set up some thorny problems down the road. That said, you don't have to panic yet, especially if this is your first late payment. Let's take a look at what happens when you're late on a credit card payment and how you might remedy the situation. 

Late fees will apply (but could be waived) 

Most credit card companies charge a late fee for each payment that isn't made on time. These fees are often between $30 to $41, which can add up if you're late on the same payment more than once. That said, the Consumer Financial Protection Bureau is currently in the process of capping late fees at $8 for big credit card companies, which could save consumers more than $10 billion each year. 

If this is your first late payment on your credit card, you might be able to get the fee waived. Even if you've been late on your credit card in the past, you might be able to get it waived if you can show a consistent history of paying on time, say 12 months of on-time payments. Either way, you'll have to contact your credit card issuer to see if it will waive the fee. Make your payment, call the number on the back of your card, state your case, and then see if it will excuse you for this late payment. 

Late payments don't immediately impact your credit score 

Contrary to what many people believe, your credit score doesn't immediately reflect a late payment. In fact, as long as you make the payment within 30 days after its due date, the late payment won't show up at all. 

In general, credit card companies don't report late payments to credit bureaus unless the cardholder is more than 30 days late. Some credit card companies may even wait longer than 30 days, though one month is the standard. 

If you can't make the payment before it's reported late to credit bureaus, your credit score could drop by 100 or so points. What's more, the longer you take to make the late payment, the more damage your credit score could sustain.

Credit card interest will kick in 

Credit card companies give you a grace period before you have to start paying interest, usually 21 days. If you're late on a credit card payment, however, this grace period ends, and you'll start to pay interest on your unpaid balance. 

Given how high interest rates are right now, your credit card's APR will work like a high-performing stock investment in reverse. Instead of gaining money daily by compound interest, you'll owe slightly more each day the balance remains unpaid. Any interest you owe for the day is added to the previous day's unpaid balance, only to be charged the same APR the following day. As you might guess, this can easily snowball into substantial debt. 

To be fair, this APR applies to unpaid balances even if you make the minimum payment before the due date. But if you're charged a late fee plus ongoing interest, the sting to your finances is even more acute. One solution might be to get an intro 0% APR credit card. You could transfer the balance from a high APR card to a zero-interest one. This could help you save on interest, though you'll want to pay off the balance before the zero-interest period ends to avoid the same problem in the future.

All things considered it's always prudent to pay your credit cards on time and, if you can, in full. While your credit score won't be affected immediately, you'll pay a fee and start accruing interest. At the very least, consider setting up an automatic payment for the minimum amount that's due. That way, you can avoid paying late fees and remain in good standing with your credit card company.