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What Happens If My Card Payment Is Returned?
July 1, 2025
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Why Would a Credit Card Payment Be Returned?
“Returned” or “bounced” payments happen when your credit card issuer attempts to collect your monthly payment but cannot get the funds from your bank. This often occurs due to insufficient funds in your checking account. Other causes include a closed or frozen bank account, or entering the wrong bank routing or account number.
Most issuers will try again, but even if a second attempt succeeds, the initial failure can still have consequences.
Fees and Penalties for a Returned Card Payment
If your credit card payment is returned, expect fees from both your card issuer and your bank.
Returned Payment Fee (Card Issuer)
- Issuers charge a returned payment fee of $25–$40.
- This fee is often higher than a late fee and less likely to be waived.
Late Fee & Interest
- A returned payment often means your bill isn’t paid on time.
- This can trigger late fees of $30–$41.
- Interest begins accruing immediately, and sometimes a penalty APR applies.
Non-Sufficient Funds Fee (Bank)
- Your bank may charge an NSF fee of $25–$37 if funds are insufficient.
- Some banks (e.g., Ally, Capital One, Wells Fargo) have eliminated NSF fees, saving customers billions annually.
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Impact on Your Credit Score and Account
Credit Score
- A returned payment fee itself does not affect your credit.
- If you miss your payment for 30+ days, it will be reported as late and hurt your score.
- Late marks can drop your score 50–100 points and remain for up to seven years.
Relationship with Issuer
- Issuers may see repeated returned payments as risky.
- Multiple incidents could lead to reduced credit limits or even account closure.
How to Fix (and Prevent) a Returned Payment
Fixing a Returned Payment
- Pay immediately using another method.
- Call your card issuer to explain and request a fee waiver.
- Check bank details to ensure accuracy.
- Monitor statements for fees and corrections.
Preventing Future Issues
- Keep a cushion in your account to cover bills.
- Set alerts for low balances and due dates.
- Pay early to allow time for corrections.
- Use autopay with caution—or split payments if cash flow is tight.
FAQ: Returned Payments and Credit Cards
Does a returned payment affect my credit score?
Yes, if it causes you to be 30+ days late. The fee itself isn’t reported, but a late payment is.
Will my issuer charge a fee?
Yes, usually $25–$40, plus potential late fees and interest.
Do banks charge for a bounced payment?
Yes, many charge $25–$37, though some have scrapped NSF fees.
What should I do if my payment is returned?
Pay right away, call your issuer, and fix the issue (e.g., account balance or details).
Can issuers close my account over returned payments?
One incident likely won’t, but repeated ones can lead to reduced limits or closure.
Conclusion
A returned credit card payment can be costly and stressful, but it doesn’t have to ruin your finances. Act quickly to fix the issue, learn from it, and use tools like Kudos to stay ahead of due dates and avoid surprises. Mistakes happen, but proactive management ensures they stay a one-time blip.
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Editorial Disclosure: Opinions expressed here are those of Kudos alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
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