Realizing that you can't make your credit card payments can be frightening. But not making the payments at all is even scarier when it comes to your credit. If your circumstances has made it impossible for you to pay your credit card bills in full, it's best to talk to the credit card company before you become delinquent.
Stop Using Credit
It may seem like an impossible task, but if you are drowning in credit card debt, you have to stop using your cards. If you want to deal with credit card companies for a lower payment, then you have to demonstrate that getting into debt you cannot pay is not a continuous cycle.
Making the Minimum
Even if you've heard for years that only making the minimum payment on your credit card bills will drag your debt out for years, consider going down to the minimum monthly payment if you've been paying the statement balance, or the entire balance, every month. Yes, interest will accrue, but paying only the minimum balance saves your credit and alerts your credit card company that something is changing, financially.
Hardship Programs
If you have several credit cards, even making the minimum payment can be impossible, especially if your interest rate has gone up. The time to contact the credit card company is the moment you realize you can't make even the minimum payment.
Credit card companies are in the business of making money, and something is better than nothing. So, if you are unable to make your payments in full, the best thing to do is to figure out how much you can afford to pay, then call and ask about any hardship programs the company offers, and offer the credit card company the amount you can afford.
Bankrate's Steve Bucci warns you to be careful when you decide on an amount to offer. "You definitely do not want to be in a position of being unable to make payments if you can get your lender to agree to your request for a hardship program."
Credit Counseling
Dealing with credit card companies can be overwhelming, especially if you're juggling multiple credit card accounts. For that reason, it may be best to let a credit counselor do the negotiations for you. A reputable credit counselor (see Resources) will help you make a budget that takes into consideration your income and all your debts. If you qualify, you may be able to enter into a debt management plan, which will allow the counseling agency to work with your creditors to reduce payments and/or fees and interest. Instead of paying your creditors each month, you will pay the credit counseling agency, who will in turn make your payments for you. A debt management plan typically lasts three to five years.
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