Can You Get a Credit Card Payment Reduced If You Lose Your Job?

If you find yourself losing your job, you have several ways to potentially reduce, consolidate or settle your credit card payments to make them more manageable. You should carefully review all of your options to determine the most appropriate resolution for your personal situation.

Notify Your Creditor

The first step is to notify your creditor. Negotiating an alternative payment arrangement can help you avoid a negative impact on your credit report and keep your account current. If your account is in good standing with no recent history of delinquent payments, you may also be able to negotiate a lower interest rate. Not only will a reduced interest rate help you in the long run by allowing you to pay off your debt more quickly, but it will also help you with your short-term goals by lowering your monthly minimum payment.

Use a Credit Counseling Service

If you have more than one revolving debt account or are uncomfortable negotiating with your creditors directly, an alternative option is to use a third-party credit counseling agency. These agencies contact your creditors on your behalf and work with them to design a plan that is manageable with your budget. Once approved, you will make one monthly to the credit counseling company, who will in turn distribute payments to each of your creditors. Because this consolidates your payments, you will likely see an increase in the total amount of your monthly minimum payments.

Debt Consolidation Loans

If you have a strong credit history, a debt consolidation loan is another option. This is an unsecured loan, so you need to furnish proof of a steady household income in order to qualify. You might need to ask a spouse or relative to co-sign the loan. The interest rate will be determined by your overall creditworthiness rating with a combination of your income and credit score.

Home Equity Loans

Homeowners may also have the option of applying for a home equity loan or line of credit to pay off revolving debt. These loans often have a much lower interest rate than those associated with traditional unsecured credit cards and can reduce your monthly required payment. To qualify for a home equity loan or line of credit, your financial institution will look at a number of factors including your credit score, the amount of equity in your home and your income.