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Key takeaways
- Always make the minimum payments to avoid interest. If you can’t even cover the minimum payments, take on extra work.
- If you’re unable to pay your bill, contact your issuer as soon as possible. Many companies offer hardship programs or payment plans to help consumers out in tough times.
- Consider credit counseling or debt relief for a structured repayment plan. These options can help manage your debt more effectively and potentially lower your interest rates.
In an ideal world, we’d all pay our credit card bills in full and on time every month. It’s the best way to avoid interest payments, prevent fees, and boost your credit score. The trouble is, life doesn’t always work like that. Emergencies happen, unexpected expenses pop up, people lose jobs, or simply forget about a bill. If you don’t have the cash to cover your bill or you’ve missed a payment, don’t worry, this too can be managed. But don’t wait and hope for the best. Try these steps instead and get ahead of the situation. The sooner you act, the easier it will be to get back on track.
1. Pay the Minimum
It’s always best to pay your credit card bills in full – it’s the only way to avoid interest payments and stay out of debt – but it’s not always realistic. When money is tight, find a way to make the minimum payment. Maybe pick up a few shifts on DoorDash or offer to babysit your neighbor’s kids. Your minimum payment is usually 1% to 3% of your total balance or $25 if your bill is small. Covering the minimum prevents you from incurring additional late fees. Plus it will protect your credit score from taking a major hit.
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2. Call Your Issuer
Calling your credit issuer and explaining your situation can be scary, but it’s one of the best things you can do. The sooner you call and tell them what’s preventing you from paying the more likely your issuer will understand and offer solutions. They may even have options that you’re unaware of. Some issuers can waive late fees or interest charges if you’ve been a good customer in the past and this is your first lapse. Others may extend your due date or allow you modified payments. If you don’t feel comfortable calling your issuer, look for a debt relief company. There are plenty of companies who specialize in negotiating credit card debt.
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Struggling with credit card debt?
If you have debts over $10,000 we can help! Lower your monthly payments. Repair your credit score. Get out of debt in 12 to 48 months.
3. Negotiate a Reduced Payment Plan
If you can’t scrape together enough to make the minimum due but still have some funds, request a reduced payment plan. The issuer may be willing to work with you since they don’t want you to default. If your debt is sent to collections, they’ll only get pennies on the dollar. With a reduced payment plan, they may still get more.
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We can lower your monthly payments, pay off $10,000 in credit card debt faster, and reduce your interest rates!
4. Ask for a Hardship Plan
If your situation is more permanent, like a job loss, consider asking for a hardship program. These programs help you make payments by temporarily lowering your interest rates or waiving fees until you get back on your feet. Be aware though that they come with drawbacks. Your credit issuer may freeze your account or reduce your credit limit as a result.
5. Create a Debt Management Plan
Credit card debt can spiral out of control and become overwhelming. If this happens, consider professional help. There are plenty of organizations that offer credit counseling and debt relief. They can help you negotiate with your creditors and create a debt management plan that fits your budget. This can result in reduced interest rates, waived fees, and the ability to get out of debt faster than if you tried on your own.
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Do you have $10,000 or more in credit card debt?
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Final Thoughts
Not paying your credit card bills is one of those things that’s best to avoid. But if it happens, know that you can recover. The most important thing is to act promptly and not ignore the situation. Communication and making an attempt to pay goes a long way. Do your best to make the minimum payments, call your credit issuer, and figure out a payment plan to get back on track. We all make mistakes, it’s how we handle them that counts.
