What is Past Due?
Past due means overdue. Typically, a bill is past due if the borrower is 30 days past the payment deadline.
How Does Past Due Work?
For example, let's assume your credit card payment is due on December 15. You forget to make the payment. On January 16, you finally remember. By then, though, it's too late. Your bill is past due.
Some accounts have grace periods (often 10 days). During the grace period, the creditor might not assess a late fee or other penalty.
Why Does Past Due Matter?
Past due bills often incur late fees, higher interest rates, penalties and other charges. Worst of all, the creditor might report the late payment to the credit reporting agencies, leaving a black mark on your credit rating (and even lowering your credit rating). In some cases, a bill get so past due (say, 90 or 180 days), that the creditor considers the account in default and may charge off the balance. That doesn't mean the customer or borrower doesn't owe the money anymore; it just means the creditor doesn't think it'll ever get the payment. At that point, it might assign or sell the account to a collection agency, which will try to collect the balance.
