Key Takeaways
-
Credit card delinquency happens when you don't pay your card for 30 days or more.
-
If your card is delinquent, you might have your credit card account suspended, revoked, or charged off, depending on how long the account is unpaid.
-
If you have a delinquent credit card, you should try to make the minimum payment or work out a payment plan with your creditor.
Many people struggle with debt management, and it’s common for people to miss the occasional credit card bill. A single late payment made a few days past the due date may result in a late fee, but may not have a huge impact on your account or credit score.
But what happens if your bill is overdue by more than a few days?
What does credit card delinquency mean?
Credit card delinquency happens when your credit card payment is late by 30 days or more. A delinquent credit card may result in late fees and potentially negatively impact your credit report.
If left unpaid, delinquency can be damaging and result in:
- Credit card suspension
- Account closure
- Being sent to a collection agency
- Charge-off on the debt
The good news is that you may have options to fix this problem and lessen the impact on your credit score and credit history.
If you’ve faced a credit card delinquency that hurt to your credit score, a secured credit card can help rebuilt your credit. The Discover It® Secured Credit Card helps you build/rebuild your credit history with responsible use.1
What do I do if my card is delinquent?
If you are late on your credit card payments, you should try to catch up as fast as possible to get your account back in good standing. If you're struggling to make payments, you can contact your credit card company and see what payment options you may have.
If you don’t catch up on your credit card payments, your card issuer may suspend, revoke, or charge-off your account.
Credit card delinquency and suspension
When a credit issuer suspends your delinquent account that means you can no longer make purchases on your card. Sometimes credit card companies will require you to make a full minimum payment and may have to review your account before reversing the suspension.
Did you know?
You can avoid delinquency on your card by making your credit card payments on time. One way that you can do this is by setting up automatic monthly payments for your credit card.
How does credit card suspension affect my credit?
Your delinquent credit card may impact your credit score, especially when combined with other factors. This is because your payment history typically makes up about 35% of your credit score (depending on the scoring model used). So, delinquency due to late payments may do some damage to your credit score.
When your credit score is low, it shows banks and lenders that you may be too high risk, making it more difficult to open a new account and secure a mortgage or personal loan in the future.
What can I do if my card issuer suspends my account?
If your credit issuer suspends your account, you may be able to get your credit card account back in good standing by paying your past due payments and maintaining a positive payment history.
If you have been going through financial hardship and don't have the money to pay yet, you might be able to get back on track by contacting your credit card company to find out if you’re eligible for a repayment plan.
Credit card delinquency and revocation
If more time passes and you still haven’t made the minimum required payments towards your past-due balance or agreed to a payment plan, your card issuer may revoke your credit card. The amount of time can vary by credit card issuer, but it’s generally after four to five months of missed payments. Once revoked, you will not be able to use the card again.
How does card revocation affect my credit?
If your card is revoked it can affect your credit utilization ratio, which is the percent of available credit you’re using. Your credit usage typically makes up 30% of your credit score (depending on the scoring model used). Because of this high percentage, using too much of your available credit may have a negative impact. The lower your utilization ratio, the better. If you have a revoked account, that line of credit no longer counts as available credit, so the percentage of credit that you’re using goes up (which increases your utilization ratio).
Plus, if you have serious delinquency with payments on your account (60-90 days past due), the delinquency may also negatively impact your payment history. But even if you have a revoked card, you still have options. You can reach out to your creditor to discuss repayment options or seek the help of a nonprofit credit counselor.
How can credit counseling help with credit card debt?
A credit counseling agency can help guide you through the steps to get out of debt. These certified counselors will assess your financial history and current state, evaluate your budget, and can create a debt management plan (DMP) that includes lowering interest rates or waiving fees. A DMP may take an additional hit on your credit score temporarily, but it often has less of an impact than declaring bankruptcy.
Credit card delinquency and charge-offs
A “charge-off” is one of the final stages of credit card delinquency. Once charged off, the account has typically been in delinquency for about six to seven months without acceptable payments.
How charge-offs impact your credit
Your card issuer may report your charge-off to the major credit bureaus (Experian®, Equifax®, and TransUnion®) and it could stay on your credit report for up to seven years. The resulting drop in your credit score depends on many factors, but charge-offs are considered negative.
You can get a free credit report through a credit bureau or via annualcreditreport.com to see whether delinquency has affected your score.
It can be difficult managing credit card bills and staying up-to-date on payments, but monitoring your account balance and making a change in spending habits go a long way in preventing debt and delinquency. If you do find yourself experiencing credit card delinquency, you’ve got several options, including:
- Write a goodwill letter to your creditor asking to remove the negative mark from your credit report (best for one-time late payments)
- Repay your debt or take out a debt consolidation loan
- Working with a credit counseling agency
- Claim bankruptcy (last resort)
Take action as soon as possible to remedy the situation and lessen the impact on your credit score.
