What Steps Should You Take After Missing a Credit Card Payment?

Posted on Tuesday, October 29th, 2024 | By IndusInd Bank

Credit cards are financial tools that enable ease of transaction. When using credit cards, you must repay the borrowed money by the credit card bill due date. Only then, the credit is considered settled. However, a financial crunch can lead to a missed credit card payment.

Credit cards charge high interest. So, missing a payment can be stressful. While it is easy to feel overwhelmed, the right steps can help minimise the impact. This article explains what to do if you miss a credit card payment. But first, it is imperative to understand what happens when you miss a credit card payment.

Understand the Consequences of a Missed Credit Card Payment

When you miss a credit card payment, you face:

• Late fees: Most credit cards charge fees for not paying on time. The exact fee they charge varies across different banks.
• Higher interest rates: Missing payments may trigger an interest rate increase. Banks can charge you with a different interest rate, known as the penalty interest rate.
• Damage to credit score: Missed credit card payments negatively impact your credit score. This, in turn, will reduce your chances of getting other lines of credit.

Things to Do When You Miss a Payment

If you hold a credit card, missed payments cause financial damage. This makes it even more important to handle missed payments quickly. Below are a few ways you can do that:

1. Check for a Grace Period

Before you panic, check whether your credit card offers a grace period. Some banks allow 30-60 days before reporting a late credit card payment to the credit bureaus. Paying within this window can save your credit score. It may also avoid late fees.

It is a good idea to check your agreement or contact customer service to confirm if you qualify for a grace period.

2. Pay the Bill as Soon as Possible

Once you realise you have missed a payment, act fast. The quicker you pay, the less financial harm you will face. You can use online banking, mobile apps, or even visit your bank. Making the payment immediately reduces the chance of accumulating fees and penalties.

For example, IndusInd Bank Credit Card holders can pay via the bank’s online portal or app. This ensures timely payments with minimal hassle.

3. Set Up Automatic Payments and Alerts

A good way to avoid missed payments is to set up automatic payments. Most banks offer this option. You can link your credit card with your bank account. The balance will be cleared automatically each month.

Additionally, you can set up reminders or alerts via SMS or email to remind you of upcoming due dates. This mix of auto-payments and alerts can cut the risk of missed payments.

Every credit card issuer handles missed payments differently. It is crucial to understand the policies of your specific card. For most cards, there are specific charges for late payment. However, some cards such as IndusInd Bank’s Pioneer Private and Pioneer Heritage Credit Card have a waiver for such charges.

Also Read: What Happens When You Default on Credit Cards?

Conclusion

Missing a credit card payment does not have to be the end of the world. By taking immediate action, you can reduce the financial and credit-related impact of a missed payment. Remember to check if you have a grace period, pay the balance as soon as possible, contact your provider for potential fee waivers, and set up automatic payments to avoid future issues.

The right credit card can also help make managing your finances easier. Consider IndusInd Bank Credit Cards like Pioneer Private to enjoy features like automated payments, flexible terms, and lifestyle rewards. You can also explore other IndusInd- Bank credit card options with varied features and benefits. For example, you can choose RuPay Credit Cards like IndusInd Platinum RuPay Credit Card and Samman Credit Card to enjoy the benefit of UPI payments. Apply Now!

Disclaimer:
The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.