Considerations

• Credit reporting agencies rely on credit card companies to report delinquent accounts. As soon as you fail to make a timely payment, the credit card issuer can report it as in default. Most banks, however, will give you several days or possibly an entire month before they consider your payment "late." Credit union cards may wait as long as 60 days to consider your account in default.
  
  

Delinquent Accounts

• Most credit card lenders wait six months before they consider your account noncollectable, according to MarketWatch. At this point, the bank believes that it cannot reasonably expect repayment on your overdue balance. The bank writes it off on their taxes and sends it to a collections agency -- called a charge-off. You will still legally owe this debt to the creditor or the collection agency that bought it, according to Bills.com.
  
  

Effects

• If you are less than 180 days late on your credit card bill, the issuer will charge late fees to your account -- up to $39 each month -- and raise your interest rate to the "default" rate, which can be 32 percent or more, according to Market Watch. When your account goes to collections, your credit score takes a huge hit, because charge-offs are almost as bad as bankruptcy. The bank or collections agency may even try to sue you in court.
  
  

Tip

• At the very least, you should make the minimum credit card payment. You can avoid default rates by paying on time and limit credit card use -- good borrowers do not use more than 35 percent of their available credit. If you cannot make payments at all on your credit card, let the credit card company know, suggests OneMint.com. They make work out a payment plan, such as freezing your interest rate, with you to prevent it going to collections.