Answers About Credit Card Payments and Late Payments

Select from the following questions about credit card payments, late payments, payment processing and other payment issues.


When is my payment considered late?

Whether a payment is late is determined by the wording in your Account Agreement. If you always insure your payment is received prior to the due date included on your statement, your payment will not be considered late.

Some banks have grace periods and you would need to review your Account Agreement to determine the specific circumstances of your account. Contact the bank directly and discuss this with them, as they will be familiar with your specific circumstances.

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I paid my previous balance in full, but additional finance charges were applied to my account. Why?

Even though you paid off your account, there could have been residual interest from previous balances. Residual interest is the daily interest that accrues between the last statement cycle date and the day that the bank receives your payment.

You may want to contact your credit card company for clarification.

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I made a payment, but it has not showed up on my credit card / home equity line of credit / personal lines of credit statement. What can I do?

Notify the bank that your payment has not been posted to your account. If you used a check to make the payment, be prepared to provide a copy of the cancelled check.

You should also file a written billing error dispute with the bank. (Use the address specified after “Send Billing Inquiries to:” on the back of the statement. This address is usually different from where you send your payment.)

File your dispute within 60 days of the date the bank mailed the first statement on which the error appeared.

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Can the bank delay the posting of electronic payments to my credit card account?

If you do not make your payment in the manner and place specified by the Account Agreement, the bank or credit card company may take up to 5 business days from receipt to credit your account.

You should review your online payment agreement to determine the bank's policies or contact the bank for an explanation.

If you believe a bank has failed to credit your payment on time, you should file a written billing error dispute with the bank. (Send your letter to the address specified after "Send Billing inquiries to:" on your statement. This address is usually different from where you send your payment.)

File your dispute within 60 days of the date the bank mailed the first statement on which the error appeared.

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I paid my credit card on the 31st day, and the bank reported me to a credit bureau. Can the bank do that?

Yes, if the payment is not received by the due date. Whether a payment is late is determined by the wording in your Account Agreement, which is the contract governing your account. The bank would have provided this Agreement to you when you opened the account.

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Can the bank apply payments to the “purchase portion” of the account first and then to the cash advance balance?

Under an open-end credit plan—such as a credit card account / home equity line of credit / personal lines of credit—Federal law does not govern the application of payments.

Generally, banks apply payments to the portion of the balance with the lowest annual percentage rate (APR) until that balance is zero. Payments then are applied to the remaining balance.

The Account Agreement discloses how the bank will handle the application of payments. You should have received a copy of this agreement when you opened the account.

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My bank increased the minimum payment on my credit card account. It stated that the OCC required the increase. Why? What should I do if I can’t afford it?

Along with the other Federal banking regulators, the OCC issued guidance in January 2003 that required changes in credit card lending and account management practices. The guidance applies to all financial institutions that issue credit cards.

One of the new requirements is to increase the minimum payment amount so that at least a portion of that payment goes toward the principal. This ensures that the debt amortizes.

Prior to this directive, the industry standard was a minimum payment amount of only 2 percent of the outstanding balance. Given that payment, with a common interest rate of 26.99 percent, it could take as long as 30 years to pay off a balance depending on the usage of the credit card. 

If you cannot afford the increase, you should contact your bank directly to discuss a payment plan.

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Why wasn't my online payment credited to my account on the same day I made it?

If you do not make your payment in the manner and place specified by the Account Agreement, the bank or credit card company may take up to 5 business days from receipt to credit your account.

You should review your online payment agreement to determine the bank's policies or contact the bank for an explanation.

If you believe a bank has failed to credit your payment on time, you should file a written billing error dispute with the bank. (Send your letter to the address specified after "Send Billing inquiries to:" on your statement. This address is usually different from where you send your payment.)

File your dispute within 60 days of the date the bank mailed the first statement on which the error appeared.

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If the due date falls on a weekend or holiday, what is the actual day my payment is due?

Check with your bank or credit card company about its policies. The payment due date is determined by the wording in your Account Agreement, which is the contract governing your account. The bank would have provided this Agreement to you when you opened the account.

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I make my credit card payment at the branch, but the bank doesn't process it for several days. Why?

If you do not make your payment in the manner and place specified by the Account Agreement, the bank or credit card company may take up to 5 business days from receipt to credit your account.

If you believe a bank has failed to credit your payment on time, you should file a written billing error dispute with the bank. (Send your letter to the address specified after "Send Billing inquiries to:" on your statement. This address is usually different from where you send your payment.)

File your dispute within 60 days of the date the bank mailed the first statement on which the error appeared.

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Can I make special payment arrangements on my credit card account?

You will have to contact your financial institution or credit card company. However, most lenders will work with their customers on an alternate repayment or collection program.

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The bank is not giving me enough time to make the payment on my credit card/ home equity line of credit/ personal line of credit account. How many days in advance of the due date does the bank have to send the statement?

Banks are required to have reasonable procedures in place to make sure that periodic statements are mailed or delivered at least 21 days before the payment is due and any grace period ends.

Revised 08/19/09

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After a payment is made, when does the bank make the additional credit available?

If you are referring to a credit card or other type of loan known as open-end credit, your available credit limit typically increases when the payment is posted to your account.

If you are referring to a closed-end credit arrangement, then your payments simply reduce the outstanding balance—with no ability to charge other amounts to it.

To learn more about your particular account, consult with your lender.
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