What happens if you miss a credit card payment?

By Benjamin Salisbury

On your credit card bill, one of the most important numbers is your due date -- miss paying at least the minimum amount by that date, and you will face consequences, such as late fees, a premature ending to your 0% deal or even a dip in your credit score.

For example, miss a Barclaycard credit card payment and a fee of £12 is applied, and interest on the full balance will be charged on the next statement, Mona Jantzi, managing director of Barclaycard, said in an emailed response to questions. late-fees

Missed payments also can have more severe repercussions.

"Missed credit card payments can affect whether banks or other providers choose to lend to you again in the future for a mortgage or car financing," said Jane Tully, director of external affairs at Money Advice Trust, in an emailed response to questions. "You may also find you are unable to access favourable rates, which will make your borrowing more expensive."

Individual lenders, though, may cut you a break, waiving fees or avoiding marks on your credit score.

"If a customer has not paid within five days of the payment due date, we send them a letter advising them that if a payment is received within 14 days of the payment due date, then their credit file won't be affected," Jantzi said. "Unfortunately, the late payment fee shown on their next statement will still apply."

Your credit rating may slip
Unless your bank explicitly says otherwise, a missed credit card payment is likely to have a negative impact on your credit report, at least for a certain period of time.

"Account information will appear on a consumer's credit report for the duration of the contract and for six years after the account is closed," Lisa Hardstaff, Equifax credit file expert, said in an emailed response to questions. "While the account is running, Equifax will display the most recent four years of payment history to ensure that potential lenders and other companies can make informed decisions based on the management of a consumer's accounts."

You may lose that special promotional interest rate
Failing to make the minimum payment can be particularly costly if you took advantage of a special 0% balance transfer or purchase rate. In this case, if you miss just one payment, you breach your contract. 

For example, if you have a £3,000 debt on a 0% balance transfer card, you'd need to pay £250 a month to pay it off in a year. If you miss your first payment and the card reverts to the standard rate of, say, 17.29%, you'd have to repay £274.03 a month to pay off the balance in a year. That is £288 more than if you'd paid on time and kept the 0% rate.

Assess your finances, then ensure you make your payments on time
Take a detailed look at your finances and income and outgoings to figure out how much you can dedicate per month to your credit card bill.

"Credit is a serious commitment which comes with both risks and consequences, so it is important that people take the time they need to make an informed decision," Edward Ware, media relations manager at StepChange debt charity, said in an emailed response to questions.

According to Tully, the minimum payment allowed must be at least 1% of the balance plus that month's interest, plus any default charges and fees. "Often, the minimum payment will be 1% of the balance plus interest, 2.25% of the balance or £5 -- whichever is the greater," she said.

Unsure how your bank calculates minimum payments? Call and ask. Then figure out the maximum balance you can carry to stay within your budget.

Once you start charging, set reminders on your phone or in your diary a few days before the bill is due, or set up a direct debit to ensure that simple forgetfulness will not result in negative consequences. Be sure to add a couple of days to account for payment processing and other delays.

What to do if you cannot make payments on time
If you are struggling to make your minimum credit card payment on time, speak to your lender and try to negotiate a plan to cover the missed payment. For instance, Jantzi says Barclaycard advises customers to call the bank, and the bank will consider each case on its own merits.

"We understand that people's circumstances change and we'll do everything we can to help when we know there's a problem," said Jantzi.

If you can see no way of making even your monthly minimum repayments, financial experts suggest you consider contacting a free debt advice agency, such as National Debtline or StepChange.

"We know from the people our advisers help that the sooner you address your financial problems, the sooner you will be able to get back on track again," said Tully.

See related: Is overpaying your credit card bill a good idea?; 4 wrong ways to pay credit card debt; 7 small mistakes that can break your score

Updated: 3 March 2017