What happens if my card payment is returned?

Written by

Edited by

Published on November 19, 2024 | 3 min read

Bankrate is always editorially independent. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Our is to ensure everything we publish is objective, accurate and trustworthy.

10'000 Hours/ DigitalVision/ Getty Images

Serious mid adult Asian woman listening on phone, sitting in office chair in dark room, holding paperwork, checking accounts, financial planning, money concerns, difficulty, debt

Key takeaways

If a credit card payment is returned, it is most likely due to insufficient funds or incorrect bank account information.
A returned payment can result in fees from both the card issuer and the financial institution, potentially impacting your credit score.
To avoid returned payments, it’s important to track and budget your spending and keep enough funds in your bank account for payments.

Sometimes, life happens, and you suddenly find it difficult to stay on top of your financial situation. You’re not alone if you’ve made a credit card payment, thinking it would go through, and suddenly discovered that it has been returned.

If you’re wondering why this happens and what it means for you and your credit score, this guide can help answer those questions. Learn why your credit card payment may have been returned and what happens next.

Why was your credit card payment returned?

Your credit card payment most likely may have been returned if you did not have sufficient funds in your bank account. Make sure to check your account to determine if this was the cause of the return.

The payment may also have been returned if you recently switched banks and forgot to update the bank account information or entered the information incorrectly.

What happens when you get a returned credit card payment?

You may be charged a returned payment fee

Banks have their own policies about how to deal with situations where the credit card payment you send them does not clear your financial institution. Typically, they will charge you a fee for a returned payment. The card issuer may also make more than one attempt to collect the money from your financial institution. If the payment goes through at some point, the issuer may still collect the returned payment fee.

The amount of the returned payment fee often varies between $25 and $40, according to Experian. It should be lower if you’ve had no other recent returned payment offense on your record, but if you have been guilty of the same offense recently, the fee could be higher. In any event, the fee should not be higher than your minimum payment due.

Card issuers could also charge you a late fee if your card payment is returned, depending on the terms of your agreement with them.

Your bank may charge you for non-sufficient funds

Not only will your card issuer charge you if your card payment is returned, but your financial institution will also typically penalize you with a “non-sufficient funds,” or overdraft, fee that could be as high as $37, according to the Consumer Financial Protection Bureau (CFPB).

However, the CFPB reports one positive development, which is that a number of large financial institutions have decided to do away with non-sufficient fund fees on their checking accounts. This will result in annual consumer savings of about $1 billion.

This positive development involves several large banks that have decided to do away with non-sufficient funds fees on checking accounts in recent months. Bankrate reports that these include:

Alliant Credit Union
Ally Bank
Bank of America
BECU (Boeing Employees Credit Union)
BMO Harris
Capital One
Citibank
Citizens Bank
Fifth Third Bank
Huntington Bank
KeyBank
PNC Bank
Regions Bank
Santander Bank
Truist Bank
U.S. Bank
Wells Fargo

How a returned payment can impact your credit

Your payment history is a big part of your credit score (accounting for 35 percent of the score), and making payments on time helps build up your score. If your card payment does not go through and you are past the payment due date, it will be seen as a late payment or even a missed payment. This tends to bring down your score since a missed payment can stay on your credit report for up to seven years.

The good news is that typically your payment would have to be more than 30 days past the due date for the card issuer to report this lapse to the credit reporting agencies. If you have an otherwise good record with your account, you should talk to your issuer’s customer representative and ask for grace for this one-time lapse.

The bottom line

If your credit card payment does not go through, your card issuer will typically charge you a returned payment fee. They could even add on a late payment fee, depending on the terms of your card agreement. Not only that, but your bank may also assess you for a “non-sufficient funds” fee.

A late or missed payment could eventually show up on your credit report and bring down your credit score, possibly sticking to your credit report for up to seven years. The best way to guard against a returned payment is to keep track of the funds in your account and budget your spending.