A returned payment fee is a charge your credit card issuer adds when a payment you made doesn’t go through. The most common cause is a bounced payment — for example, you scheduled a payment but your bank account didn’t have enough money, so the transaction was reversed. Here’s how it works and how to keep it from happening.
Why a payment gets returned
When you pay your credit card from a bank account, the issuer requests the money from your bank. If your bank can’t complete the transfer, the payment is “returned” (sometimes called a bounced or rejected payment).
The most common reason is insufficient funds — there wasn’t enough money in the account when the payment was pulled. Other causes include a closed account, an incorrect account number, or a stopped payment.
What the fee actually is
A returned payment fee is what the credit card issuer charges you for the failed payment. It’s a penalty fee, similar in spirit to a late fee, added to your next statement.
On top of that, your bank may charge its own separate fee (often called an NSF, or non-sufficient funds, fee) for the bounced transaction. So one returned payment can sometimes lead to two charges from two different companies.
Returned payment fee vs. late fee
A late fee is charged when your payment arrives after the due date. A returned payment fee is charged when your payment was attempted but didn’t clear.
They can also stack: if a payment bounces and you don’t replace it before the due date, you could end up with both a returned payment fee and a late fee for the same bill. That’s why fixing a bounced payment quickly matters.
How to avoid returned payment fees
Before scheduling a payment, make sure the bank account has enough money to cover it on the date it will be pulled — not just the day you set it up. Watch out for other automatic payments hitting the same account around the same time.
Double-check the account and routing numbers when you link a bank account, and keep that account open and active. If a payment does bounce, contact your issuer right away, make a good payment, and ask whether they’ll waive the fee — many will for a first-time, good-faith mistake.
Frequently asked questions
What’s the difference between a returned payment fee and a late fee?
A late fee is for paying after the due date. A returned payment fee is for a payment that was attempted but didn’t clear, such as a bounced bank transfer. You can be charged both for the same bill.
Will a returned payment hurt my credit?
The fee itself isn’t reported to credit bureaus, but if the bounced payment makes you miss the due date, a resulting late payment could be reported and affect your credit. Fix a bounced payment quickly.
Can a returned payment fee be waived?
Often, yes. Many issuers will waive a first-time returned payment fee if you contact them, explain it was an honest mistake, and make a good payment promptly. It never hurts to ask.
By O.B., Founder · Last reviewed June 3, 2026
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This article is general education, not personalized financial advice. Card terms, fees, and benefits are set by the issuer and can change — always confirm details on your official card terms.