Steps to Take if You Cannot Pay Your Credit Cards

Call your credit card company as soon as you realize you will have trouble paying your bill. It is best to call your credit card company before you miss any payments. However, you should call your credit card company even if you’ve missed a payment. Your credit card company may be willing to help if you’re experiencing a financial emergency. When you call your credit card company, you will need to explain the following: 

• Why you’re unable to pay the minimum. Were your hours reduced at work? Did you have an emergency expense?  

• How much you can afford to pay. Carefully review your budget, income, and expenses to determine how much you're able to pay.  

• When you will be able to start making regular payments again. Be realistic about what your situation is.

You may need to provide documentation. 

Call your credit card company immediately and make a payment as soon as possible. If this was a one-time occurrence, you only need to make sure that you don’t miss a payment in the future. Also, your card company may waive the late fee. However, if you think you will be unable to pay in the future, you may need to make other arrangements. Discuss your options with your credit card company. You will need to explain the following:  

• Why you’re unable to pay the minimum. Were your hours reduced at work? Did you have an emergency expense?  

• How much you can afford to pay. Carefully review your budget, income, and expenses to determine how much you're able to pay.  

• When you will be able to start making normal payments again. Be realistic about what your situation is. 

Ignoring your credit card bill when you can’t pay it can result in: 

• Higher interest rates,  
• Higher minimum payments 
• Late fees, and  
• Damage to your credit score. 

Yes. You should still make a payment to your credit card even if it is late. Even a late payment will still help you make progress toward repaying your debt. You may still be charged a late fee. 

It depends. Usually, credit card companies charge for late payments. However, if you call soon after the missed payment, your credit card company may waive the late fee as a courtesy, especially if you have a strong payment history. 

You may want to sign up for credit counseling or debt relief services. Nonprofit credit counseling services can teach you how to improve your financial situation. Beware of credit counseling or debt relief services that do the following:

• Charge you fees before settling your debts. 

• Guarantees it can make your unsecured debt go away. 

• Tells you to stop communicating with creditors. 

Some other options that may help your debt situation are: 

• Applying for a lower or zero percent interest credit card. You can transfer your existing credit card balance to the new card for a fee. Balance transfers can be a good option to reduce the interest you must pay on your credit card debt. 

• Requesting a new due date for your credit card bill. For example, if your current due date is before payday, you may want to change it to after payday. 

• Review your budget. Reduce or cut any non-essential expenses. 

See Act Fast If You Can’t Pay Your Credit Cards by the Consumer Financial Protection Bureau. This article was originally excerpted from there.