Credit Card Delinquency Is Rising. Here's What to Do if You Can't Make a Payment

by Lyle Daly | Updated July 21, 2021 - First published on Sept. 12, 2020

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A woman sitting next to her dog on her couch in the sun while holding a credit card and looking something up on her laptop.

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Not making your credit card payment can have some serious repercussions, but you may be able to get a break from your card issuer.

A credit card is considered delinquent when a cardholder is late on their payment by 30 days or more, which is a difficult financial situation to be in. Late payments are one of the worst things that can happen to your credit score. You'll also rack up fees every time you don't make your minimum credit card payment on time.

The credit card delinquency rate in the United States is one measure of how Americans are doing financially. This is because a past-due credit card is generally a sign of money problems. Unfortunately, this rate has been getting worse in recent years. Here's a closer look at the data on credit card delinquencies and what you can do if you're unable to pay your credit card bill.

Credit card delinquencies have shot up in 2020

When we looked at credit card debt statistics for 2020, we reviewed the percentage of credit card balances that were delinquent by 90 days or more.

The delinquency rate spiked during the Great Recession, reaching a high of 13.7% in the second quarter of 2010. As the economy recovered, it bottomed out at 7.1% in the third quarter of 2016. It's steadily increased since then, and 2020 has been a particularly bad year (as we've all noticed). These are the delinquency rates for the last three quarters as reported by the Federal Reserve Bank of New York:

  • Q4, 2019: 8.4%
  • Q1, 2020: 9.1%
  • Q2, 2020: 9.8%

A 1.4% increase over just six months is a substantial jump that indicates quite a few consumers are having more trouble making their credit card payments.

The consequences of credit card delinquency

There are several penalties that can kick in when you don't pay your credit card bill, and they get worse the longer that your account is delinquent.

The card issuer can charge you up to $29 for your first missed payment and up to $40 for additional missed payments within six billing cycles. On a 90-day delinquency, that's up to $149 in late fees.

Once your payment is 30 days late, the card issuer can report the account as delinquent on your credit report. This can cause a drop of up to 110 points in your credit score, and your score will drop even more if you pass the 60- and 90-day delinquency marks.

After 60 days, the card issuer can legally begin charging you a higher penalty APR on your balance. And after 90 days, it's much more likely that the card issuer will cancel your credit card and send the debt to a collection agency.

It's obviously important to avoid being delinquent on your credit cards, and there are a few ways to do that.

What to do when you can't pay your credit card bill

If you either won't be able to make your minimum credit card payment or you've fallen behind on your payments, you should check with your card issuer to see what your options are. Most are offering credit card relief during the COVID-19 pandemic, and this relief can include:

  • The option to skip, defer, or reduce payments
  • Waived late fees
  • Temporary interest rate reductions

To find out what your card issuer offers, you can look online for its COVID-19 credit card relief page or call the number on the back of your card. It's better to look online first, because hold times may be high when calling in. With any luck, your card issuer will work with you and you'll be able to reduce or skip one or more payments.

Another option is to contact a nonprofit credit counseling agency. These agencies can help you find ways to pay your bills. If that's not possible, they may be able to negotiate a repayment plan on your behalf.

Staying on top of credit card payments

While credit card delinquencies were already on their way up, the COVID-19 pandemic has clearly made things much worse. The good news is that credit card companies have been offering hardship plans and other forms of assistance, so you can likely get help if you need it.

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