Even the most financially savvy people sometimes get caught up in other things and forget to pay their credit cards bills on time. Missing a payment by just a day could cost you a good deal of money both in the short-term and long-term. Thankfully, the damage is usually limited to your wallet rather than your credit report.
Lenders regularly report information pertaining to your borrowing habits to the three consumer credit agencies: Equifax, Experian and TransUnion. Typically, lenders make monthly reports. These tend to occur at the end of the billing cycle. If you miss your payment by a single day, your lender will probably not mention it to the credit agencies as long as you pay the bill before the end of the next billing cycle. In theory, your lender can decide to notify the bureaus sooner, but credit agencies only factor payments that are 30 days or more late into your credit score calculations. Missing your payment by a single day might look bad, but it won't hurt your credit score.
Lenders can set their own rules for handling late payments. Most discourage delinquencies by assessing penalty fees. Your lender can assess a late fee if you miss your payment date, although some firms give you a grace period of several days before charging the fee. If your creditor does charge a fee, you might find that the fee exceeds the actual minimum payment due. Additionally, you normally have to pay the fee at the time the lender assesses it rather than in the next billing cycle.
When you establish a credit card account, you receive a contract from your lender that includes pages of fine print covering the precise details of your lending agreement. Most lenders reserve the right to increase your interest rate if you violate the terms of your agreement. Many lenders regard missing a payment date as violation of these terms. In such instances you might see the interest rate on new and existing balances jump from single digits to 30 percent or more. Your lender must notify you in writing of an interest rate change.
No laws require lenders to use a specific time as the end-of-day cutoff time for processing transactions. Some institutions credit payments on the calendar day that payments are received. But others have an end-of-business cutoff at 2 p.m. or 3 p.m. If you make your payment on the due date, but after the cutoff time, then your lender actually counts the payment as being a day late. Check your lender's payment processing policies if you plan to wait until the last minute before paying your bill.
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