Credit card debt can pile up quickly when a person can’t make their payments on time. If you find yourself in that situation, you may wonder if it’s possible to delay credit card payments. In some cases, you may be able to do so. Read on to learn your options.
Key Points
• Credit card companies may offer relief options like forbearance, reduced payments, and waived late fees for those facing financial hardship.
• Missing payments can lead to late fees, increased interest rates, and potential damage to credit scores.
• Accounts 180 days overdue may be charged off, resulting in debt collection.
• Alternatives include balance transfer cards, home equity loans, and personal loans for debt consolidation.
Credit Card Relief Options
Some credit card companies may provide financial relief programs to their customers who are facing financial hardships and having difficulty paying their bills on time. Below, you’ll learn about some of your options.
Although programs may vary by company, here are some of the relief programs that credit card companies may offer.
💡 Quick Tip: A low-interest personal loan can consolidate your debts, lower your monthly payments, and help you get out of debt sooner.
Decreasing or Deferring Payments
Many credit card companies allow cardholders to reduce or delay credit card payments for a specific amount of time by offering emergency forbearance. Once the forbearance period ends, cardholders will need to make up any skipped or postponed payments.
While the credit card company may not require cardholders to make up payments right away, they will need to begin to make at least the minimum monthly payment. Depending on the new credit card balance, the minimum payment required may have changed.
One other possibility: Many credit card issuers may agree to shifting your due date slightly to, say, better sync with when you get paid. This can be another option to inquire about.
Refunding or Waiving Late Payment Fees
Usually, when a cardholder misses a credit card payment, they are charged a late fee. Some card companies may refund or waive late fees if the customer requests so due to financial hardship.
Lowering the Interest Rate
Some credit card companies may reduce the credit card interest rate on an account if a customer is facing financial hardship. However, this rate may increase after the specified term ends.
Establishing Payment Plans
Some credit card companies help cardholders repay their credit card balance by offering payment plan options. Cardholders may be able to secure a better repayment plan that works for their current financial situation.
Keep in mind that all of these options may vary by creditor.
Consequences of Missing a Credit Card Payment
If you miss a credit card payment vs. entering into a forbearance program with your card issuer, here is what you might expect.
Increase to the Credit Card Balance
Making a late payment may increase a credit card holder’s balance in several ways. First, credit card companies can charge a late fee that can be in the range of $30 or $32, even for the first occurrence. If a cardholder misses a payment after that, the late fee could increase to $41. It’s important to note that this fee may not exceed the minimum balance due.
Another way the credit card company may increase the balance is to increase the account’s interest rate. For example, if the cardholder hasn’t made a payment for 60 days, the credit card company may increase the APR, or annual percentage rate, to a penalty APR.
Increasing the interest rate can also increase the revolving balance on the credit card. However, not all creditors may charge penalty interest.
Credit Scores May Be Impacted
Since payment history and account standing are some of the factors used to determine a cardholder’s credit score, making late payments may negatively impact it. But the amount of time a cardholder’s credit is affected can vary depending on the situation.
In general, creditors send the payment information to credit bureaus. They use codes to identify the standing of the accounts. Typically, once a payment is 30 days late, it is considered a delinquent payment to the credit bureaus.
While missing a payment may not impact a score immediately, it may appear on a cardholder’s score and stay there for several years if it happens regularly. Of course, this depends on the situation and the other factors credit bureaus use to figure the credit score.
The Balance Could Be Charged Off
Another consequence of making a late payment is that the creditor may not allow the cardholder to use it for other purchases until the card is in good standing.
Additionally, if the payment is 180 days late, the creditor may close the account and charge off the balance. If a creditor charges off the balance, it means that the creditor permanently closes the account and writes it off as a loss. However, the cardholder will still owe the outstanding balance remaining on the account.
In some cases, creditors will attempt to recover this debt by using their collections department. In other cases, they may sell the debt to a third-party collection agency that will try to get payments from the cardholder.
Creditors have some flexibility when it comes to working with their customers. For customers who have had financial setbacks such as losing a job, creditors may help them get back on track under FDIC regulations. Usually, this type of flexibility is available for consumers who show a willingness and ability to repay their debt.
Alternative Options
For consumers who find themselves struggling to make their credit card payments and don’t have creditor relief programs available, there are a few other options to consider that may reduce the financial burden of making credit card payments on time.
Balance Transfer Credit Cards
A balance transfer credit card is a credit card that offers a lower interest rate or even a 0% introductory interest rate. This could allow a consumer to transfer a high-interest credit card debt to a card with lower interest — and potentially pay off the debt faster. Usually, balance transfer credit cards have introductory periods that last anywhere between six and 21 months.
Using this method can potentially be a money-saver if the consumer no longer uses the high-interest rate credit card and continues to pay down the transferred debt at the lower interest rate.
In general, consumers need a solid credit history to qualify for a balance transfer credit card. If approved, consumers can use the new credit card to pay down high-interest debt. Therefore, this can be a solution for credit card debt repayment, as long as the cardholder can pay off the debt before the introductory period ends.
However, if the balance isn’t repaid before the introductory period ends, the interest rate typically jumps up. At this point, the balance will begin to accrue interest charges, and the balance will grow.
Home Equity Loans
With fixed-rate home equity loans, some homeowners may qualify for a lower interest rate using their home as collateral rather than using an unsecured loan (a loan that’s not backed by collateral). As with home equity lines of credit, the terms and interest rate a borrower might qualify for is based on a variety of financial factors.
It’s important to note that borrowing against a home doesn’t come without risks, such as leaving the homeowners vulnerable to foreclosure if they don’t pay back the loan.
Credit Card Consolidation
For borrowers who may not want to use their home as collateral but are struggling to pay down debt, debt consolidation with a personal loan may be a better fit for their situation. Essentially, borrowers may be able to use a personal loan with better terms and a lower interest rate to pay off credit card debt.
Using a personal loan to consolidate credit card debt can make monthly payments more manageable and potentially lower payments. Although a credit card debt consolidation loan won’t magically make debt disappear, paying off the balance might make a difference in a person’s overall financial outlook.
However, note that some lenders may charge origination fees, which can add to the total balance you’ll have to repay. You may also have to pay other charges, such as late fees or prepayment penalties, so make sure you understand any fees or penalties before signing the loan agreement.
Recommended: A Guide to Unsecured Personal Loans
The Takeaway
Staying on top of credit card payments can be difficult during times of financial hardship. Fortunately, you might have options when it comes to delaying credit card payments, including forbearance programs with your card issuer. Or, you could explore alternative options for getting out of debt for good. A credit card consolidation loan, which is a kind of personal loan, might be worth exploring.
Think twice before turning to high-interest credit cards. Consider a SoFi personal loan instead. SoFi offers competitive fixed rates and same-day funding. See your rate in minutes.
FAQ
Can I delay my credit card payments?
If you are having difficulty making credit card payments on time, it’s wise to contact your credit card issuer as soon as possible to see if they can work with you and possibly allow you to delay a payment. They might be able to waive late fees and change your payment due date going forward to help ease the financial stress.
Does delaying credit card payments affect credit scores?
Delaying credit card payments (or skipping them) can negatively impact your credit score and lead to additional fees and potentially a higher interest rate. Your payment history is the single biggest contributing factor to your credit score, and late or skipped payments can bring your score down.
Can you ask credit card companies to defer payments?
You can ask your credit card if they can defer payments for a period of time or otherwise work with you if it’s challenging to pay what you owe. They are not, however, obligated to agree to do so. You might have to find other ways to manage your debt.
About the author
Ashley Kilroy
Ashley Kilroy is a seasoned personal finance writer with 15 years of experience simplifying complex concepts for individuals seeking financial security. Her expertise has shined through in well-known publications like Rolling Stone, Forbes, SmartAsset, and Money Talks News. Read full bio.
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