Your card gets reported as delinquent, your interest rate rises, and collection attempts begin

When you miss a credit card payment, the card issuer marks your account as delinquent. The exact timeline depends on how late you are: 30 days late triggers a report to the credit bureaus and usually a late fee; 60 days late often means a higher interest rate kicks in; 90 days late typically means the issuer stops treating it as a normal account and starts collection efforts. None of this happens instantly—you usually get a phone call or letter first—but it does happen automatically once you cross each threshold.

The consequences compound. Your credit score drops immediately when the delinquency is reported. The interest rate on your card may jump to a "penalty rate," which can be 25% or higher depending on your card's terms and your state's laws. You'll owe late fees—usually $25 to $40 for the first late payment, sometimes more for subsequent ones. If you don't pay within 180 days (six months), the issuer typically writes off the debt and sells it to a collection agency, which then owns the right to pursue you for the full amount.

Key Takeaways

  • Your account enters delinquency at 30 days late, triggering credit bureau reporting and late fees that start at $25 to $40.
  • At 60 days late, your interest rate usually jumps to a penalty rate, which can exceed 25% depending on your card and state law.
  • At 90 days late, the issuer typically stops treating it as a regular account and begins formal collection efforts.
  • After 180 days without payment, the issuer usually writes off the debt and sells it to a collection agency that can pursue you for the full amount.
  • Contacting your card issuer before you miss a payment gives you options like a hardship plan or temporary rate reduction that you lose once you're delinquent.

What happens in the first 30 days

Your payment is due on a specific date each month. If you don't pay by that date, you're technically late immediately, but the issuer doesn't report you to credit bureaus right away. Most issuers give you a grace period of a few days—often until the 21st day of the billing cycle—before they report the delinquency. During this window, you'll receive a notice (usually by mail or email) reminding you that payment is due.

Once you hit 30 days late, the issuer reports the delinquency to Equifax, Experian, and TransUnion. This report stays on your credit report for seven years. You'll also be charged a late fee—typically $25 for a first offense, up to $40 for repeat late payments within six months. The issuer may also start calling you to collect. These calls are legal and can happen multiple times per week.

The 60-day mark and penalty interest rates

At 60 days past due, your card issuer can apply a penalty interest rate to your account. This is a higher rate than your regular APR, and it applies to your entire balance, not just new charges. The exact rate depends on your card's terms and your state's usury laws—some states cap how high the rate can go, while others don't. You can find your card's penalty rate in the terms and conditions you received when you opened the account, or by calling the issuer.

The penalty rate makes your debt grow faster. If you owe $5,000 at a 25% penalty rate and make no payments, you'll owe roughly $5,312 after three months just from interest. This is why the longer you wait to address the problem, the harder it becomes to catch up. Some issuers will remove the penalty rate if you bring your account current, but they're not required to—it depends on the issuer's policy.

What happens at 90 days and beyond

At 90 days past due, the issuer typically stops treating your account as a normal credit card account. They may freeze your card so you can't make new charges. They escalate collection efforts, which can include calls from the issuer's internal collections department, letters, and eventually referral to a third-party collection agency. The issuer may also sue you in small claims or civil court to recover the debt, depending on the amount owed and your state's laws.

You'll continue to accrue interest and fees during this period. The issuer may also report the delinquency to the credit bureaus again at 90 days, 120 days, and 180 days, which further damages your credit score. Each report is a separate negative mark on your credit history.

Charge-off and debt collection

After 180 days (roughly six months) without payment, the issuer typically "charges off" the account. This means they write it off as a loss on their books and stop trying to collect it themselves. However, charging off does not erase your debt—it simply means the issuer has given up on collecting it directly. The issuer then sells the debt to a collection agency for a fraction of what you owe, often 5 to 10 cents on the dollar.

The collection agency now owns the right to pursue you for the full amount you owe, including the original balance, interest, and fees. They can call you, send letters, and sue you in court. The charge-off itself appears on your credit report and stays there for seven years from the date of first delinquency. A collection account also appears on your report and can stay there for seven years from the date it's reported, though it may fall off sooner if the debt is paid or if the collection agency removes it voluntarily.

Options before you miss a payment

If you know you can't pay your full balance, contact your card issuer before your payment is due. Many issuers offer hardship programs for people facing temporary financial difficulty. These programs may include a lower interest rate, a reduced monthly payment, a pause on payments for a set period, or a combination of these. The catch is that you must ask before you're delinquent—once you miss a payment, the issuer is under no obligation to offer these options.

When you call, be specific about your situation: job loss, medical emergency, reduced hours, or whatever applies. The issuer's hardship department is separate from collections and has authority to modify your account terms. A hardship plan typically lasts three to twelve months, after which your regular terms resume. During the plan, the delinquency is not reported to credit bureaus, which protects your credit score.

What you can do if you're already delinquent

If you've already missed payments, your options are more limited but not zero. You can still contact the issuer and try to negotiate a settlement or payment plan, though they're less likely to offer favorable terms once you're delinquent. Some issuers will accept a lump-sum settlement for less than the full amount owed—for example, paying $3,000 to settle a $5,000 debt—but this varies by issuer and your account history.

If the debt has been sold to a collection agency, you can negotiate directly with the agency. Collection agencies often accept settlements because they bought the debt for pennies on the dollar and any payment is profit. You can also request a payment plan from the collection agency, though the terms are usually less favorable than what the original issuer would have offered.

Before you settle or pay anything, get the agreement in writing. Ask the collection agency or issuer to confirm in writing that the payment will settle the debt in full and that they will not pursue further collection. Without this, you could pay and still face a lawsuit.

How this affects your credit and finances

A delinquency damages your credit score immediately and the damage lasts for years. The exact impact depends on your overall credit profile—someone with excellent credit loses more points from a single late payment than someone with fair credit. A 30-day delinquency typically costs 60 to 100 points; a 90-day delinquency can cost 130 to 200 points or more.

The damage fades over time. After two years, the delinquency has much less impact on your score. After seven years, it falls off your report entirely. However, during those seven years, lenders can see it and may deny you for loans, credit cards, or mortgages, or offer you worse terms. Some employers and landlords also check credit reports, so a delinquency can affect your ability to rent an apartment or get hired.

Frequently Asked Questions

Can a credit card company sue me for unpaid debt?

Yes. Once your account is delinquent, the issuer or a collection agency can sue you in civil court to recover the debt. The amount they can recover depends on your state's laws and the card's terms. If they win, they can garnish your wages or place a lien on your property, depending on your state.

What's the difference between the issuer and a collection agency?

The issuer is the bank or company that issued your card. A collection agency is a third party that buys the debt from the issuer after charge-off. The collection agency now owns the debt and has the legal right to pursue you. Both can sue, but collection agencies often have more aggressive tactics.

If I pay the debt after it's charged off, does it disappear from my credit report?

No. Paying a charged-off debt does not remove it from your credit report. It will still show as charged-off, but it may be reported as "paid" or "settled," which is better than "unpaid." The account stays on your report for seven years from the date of first delinquency, regardless of whether you pay it later.

Can I negotiate a lower payoff amount with the collection agency?

Yes, collection agencies often accept settlements for less than the full amount owed because they bought the debt cheaply. However, you must get any settlement offer in writing before you pay. Ask them to confirm that the payment settles the entire debt and that they won't pursue further collection.

What happens if I ignore collection calls and letters?

If you ignore them long enough, the collection agency may sue you. If they win a judgment, they can garnish your wages, freeze your bank account, or place a lien on your property, depending on your state's laws. Ignoring the problem makes it worse, not better.