Like clockwork, bills arrive in our mailboxes and inboxes. Month after month it’s our responsibility to pay them before due dates pass. Even the most organized among us can attest that sometimes a payment slips through the cracks for any number of reasons. We’re only human after all — we all make mistakes, and usually the fallout for an occasional missed payment isn’t too detrimental, provided you take action to rectify it as soon as possible.
A recent survey from WalletHub actually found that credit card payments top the list of bills we worry the most about missing. Just under one-third (29 percent) of respondents are primarily concerned about missing a credit card payment, followed by their mortgage (26 percent), taxes (18 percent), electricity (12 percent), auto loan (10 percent) and cable (5 percent).
Curious to learn more about why people miss credit card payments — and what to do if you find yourself in this situation?
Common Reasons for Missing Credit Card Payments
There are many, many reasons why someone might miss a payment or fall behind on bills. People who have sought out debt relief cite many examples — like these Freedom Debt Relief reviews, many of which attribute missed payments to hardships like medical expenses, job loss, divorce or family troubles.
The aforementioned WalletHub survey uncovered some of the leading reasons why people miss credit card payments. Here were the results:
- Forget (44 percent)
- Don’t have enough money (30 percent)
- No late fees on card (9 percent)
- Traveling (9 percent)
- Too busy (8 percent)
The survey also found men are 10 percent more likely to miss a payment due to forgetfulness than women — and high-income earners are twice as likely as low-income earners to do so.
Having an “oops!” moment and realizing you’re a few days late on your credit card bill generally isn’t a huge deal. If it’s your first time doing so, you may get off with a warning or a fee of $30 or so. But chronic late payments can trigger penalties, like higher annual percentage rates (APR).
After 30 days or longer, your credit card issuer can report the late payment to credit bureaus. This is the point at which missed payments can start putting a dent in your credit score, although the exact drop depends on your financial history. According to Experian, just one missed payment will cause more damage “if you had excellent credit and a clean credit history.” You’ll likely still experience a drop — albeit a smaller one — if your history already contains late payments.
It’s also important to note that how late a payment is will dictate its effect on your credit report. A 30-day-late payment is usually less detrimental than one 60, 90 or 120 days tardy.
Tips for Avoiding Missed Credit Card Payments
Perhaps the most foolproof way to avoid missing a payment is to set up automatic payments. As long as you have enough money in your bank account on the day the automatic payment is set to go through, it’ll be one less task on your to-do list. And, of course, you should still check your statements to monitor your spending habits and catch any errors.
It’s also wise to keep stashing away a percentage of your income into an emergency fund. This will help you handle financial catastrophes in stride — like a trip to the emergency vet, your car dying on the side of the road or an unexpected layoff — rather than having to put them all on credit, which can exacerbate the cycle of late payments.
People miss credit card payments for all types of reasons, from financial hardships to plain old forgetfulness. It’s worthwhile to do everything you can to avoid this scenario, though, as it can bring down your credit score after 30 days.