Your credit card issuer will report the missed payment to credit bureaus, charge you fees and interest, and eventually may pursue collection or legal action if the debt goes unpaid for months.
The first missed payment triggers a chain of events that starts within days. Your card issuer will charge a late fee (usually $25 to $40 for the first miss, more for repeat misses), and your interest rate may jump to a penalty rate, sometimes 29% or higher. Within 30 days of that first missed payment, the issuer reports it to the three major credit bureaus — Equifax, Experian, and TransUnion — and it appears on your credit report.
If you pay within 30 days, the damage is limited to the fee and the reported late payment. If you don't, the consequences compound. After 60 days unpaid, the late payment is reported again. After 90 days, your account is typically charged off — the issuer writes it off as a loss on their books and may sell the debt to a collection agency or pursue collection themselves.
Key Takeaways
- A late payment is reported to credit bureaus after 30 days and damages your credit score immediately, affecting your ability to borrow for years.
- Late fees and penalty interest rates compound the debt, and after 90 days unpaid the account is usually charged off and sent to collections.
- Collection agencies can sue you in court, and if they win, they can garnish your wages or place a lien on your property, depending on your state.
- The debt does not disappear — it remains on your credit report for seven years and can be collected on for longer, depending on your state's statute of limitations.
- Contacting your issuer before you miss a payment, or as soon as you know you cannot pay, may open options like a hardship plan or temporary payment reduction.
How late fees and interest compound your debt
When you miss a payment, your issuer charges a late fee immediately. Federal law caps the first late fee at $25 and subsequent fees at $35, but your card agreement may allow lower amounts. More damaging is the interest rate change: most cards include a penalty rate clause that raises your APR to the maximum allowed under your card agreement — often 29.99% — if you miss a payment by 60 days or more.
That higher rate applies to your entire balance, not just new charges. If you owe $5,000 and your normal rate was 18%, you were paying roughly $75 per month in interest. At 29.99%, that same balance costs you about $125 per month in interest alone. The longer you don't pay, the more interest accrues, and the harder it becomes to catch up even if you want to.
What happens to your credit score
A single late payment can drop your credit score by 100 points or more, depending on your starting score and credit history. The damage is heaviest in the first few months after the late payment is reported. A score of 750 might fall to 650; a score of 680 might fall to 580. The impact lessens over time, but the late payment remains visible on your report for seven years from the date you first missed the payment.
During those seven years, the late payment makes it harder to borrow. Mortgage lenders, auto lenders, and other credit card issuers will see it and either deny you or charge you a higher interest rate. Some employers and landlords also check credit reports, and a late payment can affect your chances of being hired or approved for housing.
Charge-off and collection agency involvement
After 120 to 180 days of non-payment (the exact timing varies by issuer), your account is charged off. This does not mean the debt is forgiven — it means the issuer has given up trying to collect and has written it off as a loss. At this point, the issuer may sell your debt to a third-party collection agency, or they may keep it and pursue collection themselves.
A collection agency that buys your debt now owns the right to collect it. They will contact you by phone, mail, and sometimes email, demanding payment. Under the Fair Debt Collection Practices Act, they cannot call before 8 a.m. or after 9 p.m., cannot harass you, and cannot threaten illegal action. But they can and will pursue legal remedies if you continue to ignore them.
Lawsuits, wage garnishment, and liens
If a collection agency or the original issuer decides to sue, they file in small claims court (for smaller debts) or civil court (for larger ones). If they win — and they often do, especially if you do not show up to defend yourself — they receive a judgment against you. That judgment is a court order stating you owe the debt.
With a judgment in hand, the collector can pursue wage garnishment, which means your employer is ordered to withhold a portion of your paycheck and send it to the collector. The amount varies by state but is often 10% to 25% of your disposable income. In some states, collectors can also place a lien on your home or other property, meaning they have a legal claim against it and can force a sale to recover the debt.
The right to sue and the methods available to collect vary significantly by state. Some states cap how much can be garnished; others allow more. Some states have longer statutes of limitations (the time period in which a collector can sue) than others. A debt that is uncollectable in one state may be fully collectable in another.
How long the debt can be collected
Your credit report shows the late payment for seven years. But the debt itself can be collected for longer. Most states have a statute of limitations — a time limit on how long a creditor or collector can sue you — that ranges from three to ten years, depending on the state and the type of debt. After the statute of limitations expires, a collector cannot sue you, but they can still contact you and ask for payment.
The clock on the statute of limitations usually starts from the date of your first missed payment or the date you last made a payment, depending on your state. Making a payment or acknowledging the debt in writing can restart the clock in some states. This is one reason collectors push hard for any payment, even a small one — it can extend their window to sue.
Options if you cannot pay right now
If you know you cannot make your payment, contact your card issuer before you miss it. Many issuers offer hardship programs that temporarily lower your interest rate, reduce your monthly payment, or pause interest accrual for a set period. These programs are not widely advertised, but they exist, and issuers prefer them to charge-offs because they recover at least some of the debt.
To access a hardship program, call the customer service number on the back of your card and ask to speak with a representative about your situation. Be honest about why you cannot pay — job loss, medical emergency, divorce. Have a realistic number in mind for what you can pay each month. The issuer will not offer a program if you cannot demonstrate that you can actually make the reduced payments.
If you are already behind, you can still negotiate. Some collectors will accept a lump-sum settlement for less than you owe, or a payment plan spread over months or years. Get any agreement in writing before you pay. Do not assume a verbal promise is binding.
Frequently Asked Questions
Can I be arrested for not paying a credit card?
No. Debt is a civil matter, not a criminal one. You cannot be jailed for owing a credit card company money. However, if you ignore a court order related to the debt — such as failing to appear in court or ignoring a wage garnishment — you can face contempt of court charges, which can result in jail time.
Will the debt go away if I ignore it long enough?
The debt does not disappear, but your creditor's right to sue does expire after the statute of limitations passes — usually three to ten years depending on your state. After that, they cannot take you to court, but they can still contact you and the debt remains on your credit report for seven years from the first missed payment.
What is the difference between a charge-off and a write-off?
A charge-off is when your issuer removes the account from their active portfolio and reports it as a loss. A write-off is an accounting term meaning the issuer has decided the debt is uncollectable. Both mean the same thing in practice: the issuer has stopped trying to collect and may sell the debt to a collection agency.
If I pay a collection agency, does it remove the late payment from my credit report?
Paying does not remove the late payment itself, which stays for seven years. However, paying a collection account in full may improve your credit score slightly because it shows the account is now resolved. You can also ask the collector to remove the account from your report in exchange for payment, though they are not required to agree.
Can I negotiate with a collection agency to pay less than I owe?
Yes. Collection agencies often accept settlements for 30% to 60% of the original debt because they bought the debt at a discount and any payment is profit. Make an offer in writing, get their acceptance in writing, and confirm the terms before you pay. Ask them to remove the account from your credit report as part of the deal, though they may refuse.