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Missing a credit card payment due date can have financial and credit-related consequences. The following table explains the key effects:
| Consequence | What It Means |
|---|---|
| Late payment charges | The card issuer may levy a late payment fee if the account remains past due for more than three days. The fee depends on the card issuer's applicable fee structure. |
| Interest on outstanding balance | Interest may be charged on the outstanding balance if the total amount due is not paid by the due date. The interest-free credit period may also be suspended. |
| Credit score impact | An overdue account reported to credit bureaus may negatively affect the cardholder's credit score. The extent of the impact varies. |
| Loss of interest-free period | The cardholder may lose the interest-free credit period until the outstanding balance is cleared and the issuer's conditions for restoring it are met. |
| Card restrictions | Prolonged non-payment may result in restrictions or suspension of card usage, depending on the issuer's policies and applicable regulations. |
1. Late Payment Charges
Credit card issuers may levy late payment charges when a cardholder fails to pay the amount due and the account remains past due for more than three days. The applicable fee varies by bank, card variant and outstanding amount.
For example, a card issuer may have different late payment fee slabs for lower and higher outstanding balances. Cardholders should check their card's Most Important Terms and Conditions (MITC) or the latest fee schedule to understand the applicable charges.
2. Interest on Outstanding Credit Card Dues
Missing the credit card payment due date can result in interest being charged on the unpaid balance. If the total amount due is not paid by the due date, the interest-free credit period may be suspended. The interest will be calculated from the dates of the relevant transactions on the outstanding amount, after adjusting for payments, refunds and reversed transactions.
For example, if a cardholder has an outstanding balance of ₹20,000 and does not pay the total amount due by the payment deadline, interest may be charged on the eligible outstanding balance. The applicable rate and calculation method depend on the credit card's terms and conditions.
Cardholders should note that paying only the minimum amount due does not necessarily prevent interest from being charged. It helps avoid leaving the minimum required amount unpaid, but the remaining balance can continue to attract interest.
3. Impact on Credit Score
Missing a credit card payment can affect the cardholder's credit history and credit score. If the account remains past due for more than three days, the issuer may report the overdue status to credit bureaus.
A reported payment delay can signal repayment risk to lenders and may affect future applications for credit cards, personal loans, home loans or other credit facilities. The extent of the impact depends on factors such as the duration of the delay, the payment history and the cardholder's overall credit profile.
Cardholders can monitor their credit profile through a free credit score check.
4. Loss of the Interest-free Credit Period
Credit cards generally offer an interest-free period on eligible purchases when the cardholder pays the credit card bill in full and on time. However, if the total amount due is not paid by the due date, the interest-free credit period may be suspended.
Interest will be be charged on new transactions, including from their respective transaction dates, as specified in the card's terms and conditions. To avoid additional interest costs, cardholders should clear their outstanding dues in full.
5. Restrictions on Credit Card Usage
If a cardholder continues to miss payments, the issuer may restrict or suspend card usage in accordance with its policies and applicable regulations. Continued non-payment can also lead to further collection activity and may affect the cardholder's ability to obtain credit in the future.
RBI's prudential framework also provides for a credit card account to be treated as a non-performing asset if the minimum amount due remains unpaid for 90 days from the payment due date. Cardholders should therefore address overdue payments as soon as possible instead of allowing unpaid dues to accumulate.
