Credit card debt can creep up on you. An unexpected cost here, a big purchase there, and soon you owe more on your credit cards than you can afford to pay each month. You’re not the only one who has had trouble making even the minimum payment on their credit card bill. But it’s important to take action quickly before the situation gets worse. We will talk about what you can do if you can’t pay your credit card bills in this article.
Contact Your Credit Card Company Immediately
If you know you won’t be able to make your minimum credit card payment, the very first thing you should do is contact your credit card issuer. Let them know about your situation right away – don’t wait until after you’ve missed the payment. Many credit card companies are willing to work with customers who are going through financial hardship.
When you call, be prepared to explain why you can’t make the payment and see if they can offer some solutions. Some possibilities may include
- Lowering your interest rates temporarily
- Reducing your minimum payment
- Letting you skip a payment without penalty
- Setting up a payment plan with smaller payments over several months
Get any agreement you make with the credit card company in writing. This will protect you in case there are any discrepancies later. If you take action, it shows that you’re honest and accountable for the debt you owe. Your credit card company will likely look upon this favorably.
Review Your Budget to Find Ways to Pay
Make a list of all the money you make and spend each month to see if you can find any extra to put toward your credit card payments. Here are some ideas that may help:
- Reduce non-essential expenses like cable bills, gym memberships, etc. Cut out anything that’s not absolutely necessary.
- Look for ways to earn extra income with a side gig or part-time job.
- See if you qualify for any government assistance programs.
- Consider getting a roommate to cut housing costs.
- Sell any assets you no longer need like an extra vehicle, jewelry, electronics, etc.
Even an extra $100 or $200 per month could make a difference in keeping up with minimum payments. Try to pay as much as you can above the minimum to avoid ballooning interest charges.
Ask About Changing Your Payment Due Date
Another option is to ask your credit card company to change your payment due date to better align with your pay schedule. For example, if your payment is due on the 5th of the month but you get paid on the 15th, having the due date changed to the 20th could help you avoid late fees.
Most credit card issuers will work with customers on selecting a due date that fits their budget Just keep in mind it may take a billing cycle or two for the change to take effect
Consider Credit Counseling
If you have multiple credit cards or other debts and are having ongoing issues making payments, a nonprofit credit counseling agency may be able to help. They can work with you to create a debt management plan that allows you to consolidate payments and negotiate lower interest rates with creditors. This can make monthly payments much more affordable.
A debt management plan could help you pay off credit card balances faster as well. Just be sure to use an accredited, reputable agency. Fees for these services are typically very low or even free.
Use Balance Transfer Offers Strategically
Balance transfer credit cards allow you to move debt from one card to another and take advantage of a 0% intro APR period, usually lasting 12-18 months. If you have good credit, you may be able to qualify for one of these cards with a $0 balance transfer fee.
This can allow you to pay down a large chunk of credit card debt without accruing additional interest charges for over a year. Just be sure you can pay off the full transferred balance before the intro period ends.
Understand the Impacts of Not Paying
Before ignoring credit card bills, know there can be serious consequences:
- Late fees around $30-40 per missed payment
- Penalty interest rates of 25-30% may be applied
- Your credit score will take a hit, sometimes a dramatic one
- The account could be sent to collections after 180 days
- You can be sued by creditors and have wages garnished
- Interest continues growing, making the balance harder to pay off
Your credit score affects everything from loan rates to apartment rental applications and insurance premiums. Damaging it can cost you money for years. Avoid this by taking steps to maintain payments, even minimum ones.
Can Debt Settlement Help?
With debt settlement, a company negotiates to have your credit card balances reduced and set up a monthly payment plan. However, these programs come with major drawbacks:
- They charge hefty fees, often 20-25% of the debt amount
- Your credit score will plummet due to defaulting on accounts
- You can get sued by creditors at any time
- Any reduced balances may be treated as taxable income
Debt settlement should only be considered as an absolute last resort if you have no possible way to pay and credit counseling has not helped.
Explore Consumer Protections
Under the CARD Act, credit card companies have to evaluate customers’ ability to make minimum payments before opening a new card or increasing a credit limit. If you can show you were unaware of changes that made payments unaffordable, you may have certain rights in getting terms modified.
You can also submit complaints about credit card companies to the Consumer Financial Protection Bureau. They have authority to take enforcement actions against lenders engaging in abusive or deceptive practices.
Create a Plan to Avoid Future Problems
Once you get back on track with credit card payments, it’s important to take steps to avoid ending up in this situation again down the road:
- Build up an emergency fund with 3-6 months of living expenses
- Only charge purchases you know you can pay in full each month
- Pay down balances aggressively and avoid running up large balances
- Reduce limits on unused cards to free up credit for emergencies
- Review your budget frequently and look for waste to cut
- Build additional streams of income through freelancing, etc.
With diligent monitoring of expenses and prudent use of credit cards, you can get out of debt and work toward financial stability. Don’t wait to ask for help – contact credit card companies right away if you become unable to make payments. There are always options to avoid damaging your finances long-term.
Consider Applying for a 0% APR Credit Card
If one-time expenses come up that you need extra time to pay off, a credit card with 0% introductory APR might be able to help. These cards don’t accrue interest for a set amount of time, often for 12 months or longer, which gives you time to chip away at the expense.
Cards with 0% APR can come in two forms, some offering an interest-free period for new purchases while others focus on balance transfers. When you perform a balance transfer, you’re essentially paying off one credit card with a new one. Most cards have a fee for this—think 3-5%—but that might save you a year’s worth of interest charges at 20%.
It’s important to remember that interest will begin to accrue when your 0% APR period ends if you haven’t paid off the balance yet, so you still need to make payments regularly. Be sure to add these payments into your budget instead of assuming you’ll figure it out in the future and repeating the cycle.
If your credit is already in rough shape, being approved for a new credit card probably isn’t an option. However, if you recently hit a rough patch and your credit score is otherwise respectable, choosing one of the best 0% APR credit cards might be a good way to help get yourself back on track.
Make a Payment As Soon As Possible
Making a payment after the due date won’t help you avoid late fees but it still helps. Every dollar you pay reduces your interest charges. If you can pay more than the minimum payment, it will have an even bigger impact: As required by law, payments are always applied to balances at the highest interest rate first, such as those associated with a penalty APR. It also matters because many cards compound interest daily.
Making payments of any size also helps keep you out of full credit card delinquency and can keep negotiations with your card issuer on the table.
What should I do if I can’t pay my credit cards?
FAQ
What happens if I can’t pay my credit card bill?
Can I cancel a credit card if I can’t pay it?
How to stop paying credit cards legally?
What if I can’t pay my credit card payment?
Juggling a budget in order to pay bills can be stressful. There may be concerns about missing payment deadlines and being able to pay everything when it’s due. If you can’t make your minimum monthly credit card payment, it can help to contact your lender first. But what else might happen? Learn more and see what options might be available.
Can I use a credit card to pay my bill?
Most credit card companies offer multiple payment options, including online payments, phone payments, and mail payments .You can also set up automatic payments to be issued directly from your primary
What happens if you don’t pay your credit card bill?
There are several outcomes of not paying your credit card bill, and they’re all relatively serious. The consequences may vary depending on the number of payments missed and the number of accounts that have missed payments. After enough missed payments, the consequences become more serious.
What should I do if I don’t pay my credit card bill?
Call your credit card issuer. It’s important to keep the lines of communication open with your credit card company when you’re having trouble paying your bill. Especially if your situation is temporary, informing your issuer of a late or missing payment could lead them to hold or waive fees if you’re otherwise in good standing.