5 things to do if you can’t pay your credit card bill
Whether you’re facing a lasting financial hardship or hit a one-month road bump, missing a credit card payment can be scary.
Not only does a missed payment come with fees and penalties that could set you back even further, but the potential hit to your credit score could limit future borrowing access.
However, missing a payment altogether should always be a last resort. Before you get to that point, there are a few actions you can take, such as using a balance transfer credit card, to remain in good standing and get your payments back on track.
1. Contact your credit card issuer
As soon as you know you cannot make this month’s payment, call your credit card company. While credit card forgiveness is rare, you might be able to negotiate your debt.
In any case, your issuer can help you work out a solution, whether a one-time exception for a single financial setback, a longer-term payment plan, or a hardship program to keep you from falling behind on payments. Here are a few examples of options you may have:
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Extend your payment due date
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Reduce the monthly payment amount you owe
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Pause fees
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Change your monthly due date
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Offer a lower interest rate
Your credit card account history may affect which of these types of accommodations you qualify for. If you consistently pay on time and haven’t fallen behind in the past, you may be more likely to get an exception this time.
You can contact your issuer by calling the number on the back of your card or logging into your online account and messaging a representative.
2. If you can, make the minimum payment
Missing a credit card payment can result in late fees and show up on your credit report. But even if you can’t pay off your entire balance (or the amount you usually put toward your credit card bill), do your best to pay something.
If you have enough money to pay at least the minimum amount required, that’s better than paying nothing. You might still take on interest charges, but won’t risk fees and penalties or have a missed payment reported on your credit history.
Payment history, after all, is the most influential factor in your credit score. If you make at least the minimum payment every month, your credit card company will still report a positive payment history to the credit bureaus. That way, you’ll maintain good credit while working to pay off the rest of your balance.
Dig deeper: How to request a lower credit card minimum payment
3. Use a 0% APR balance transfer card
Before you miss a payment and risk a hit to your credit, consider whether a balance transfer credit card could lower your debt and get you back on track. You can use a card with an introductory 0% APR on balance transfers to pay down your existing balance over 12-21 months before interest kicks in.
These cards typically require good-to-excellent credit, so you’re most likely to qualify with a solid credit score.
Here are some of the best credit cards for balance transfers today:
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U.S. Bank Visa® Platinum Card
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Citi Simplicity® Card
Related: The best 0% APR credit cards
4. Check your budget
Get creative about ways you can fit the payment into your budget. Depending on how your issuer calculates minimum payments, you may only need to come up with $35-$55 to avoid late fees and penalties. Over time, though, it’s still important to pay more than the minimum to avoid higher interest rates and mounting credit card balances.
Sit down and comb through your budget, including credit card, debit card, and cash spending over the past few months. Look for unnecessary purchases and expenses you may not know you’re paying, like forgotten subscriptions or other recurring payments. While you may need to adjust your budget more to ensure you don’t overspend and miss credit card payments in the future, eliminating unnecessary budget items can be a great place to start making lasting changes.
If you’re currently going through a financial hardship that’s preventing you from paying your credit card bills, consider dipping into your savings account if you have one — for example, an emergency savings fund. Later, when your payments are back on track, you can build the balance back up.
Learn more: Use our credit card payoff calculator to save hundreds by tackling your debt now
5. Get a credit counselor
You may benefit from a more lasting solution if you’re consistently behind on your credit card bills. A nonprofit credit counseling organization can help you find counselors who will work with you to get out of debt and create a financial plan at a low cost or even for free. A credit counselor can help you develop a debt management plan with lower monthly payments for your existing balances.
Make sure you seek credit counseling help from a trustworthy, nonprofit organization. The Financial Counseling Association of America (FCAA) and the National Foundation for Credit Counseling (NFCC) are good places to start. You can also read more about what to look for from a credit counselor — and red flags to avoid — from the Consumer Financial Protection Bureau (CFPB).
Related: Are credit card debt relief programs legit?
6. Use a debt consolidation loan
You can consolidate credit card debt with a personal loan as part of a debt repayment plan, giving you the opportunity to lower your overall interest rate on existing debt. For example, if you have debt on multiple credit cards with interest rates over 18%, it could make sense to pay off your debt with a personal loan with an interest rate of 10% or lower.
This can accomplish two things:
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Organize your debt: Having all your debt in one place can make it easier to track and pay off.
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Lower your interest charges: You will pay less in interest if your overall interest rate is lower.
Learn more: How to consolidate credit card debt
FAQs about what happens if you can't pay your credit card
What happens if I can't afford to pay my credit card?
If you can’t afford to pay your credit card bill, you may be on the hook for late fees and high interest rates. Lenders will report missed payments to the major credit bureaus, and your credit score will likely take a huge hit because of the delinquency.
After missing credit card payments for multiple consecutive months, your credit card issuer may write off your account as a loss and close it, marking it as a charge-off, which shows up on your credit report.
Learn more: The best ways to pay off credit card debt
How do I pay off my credit card if I have no money?
Contact your lender or credit card issuer immediately to see what options are available. Many credit card companies are willing to help if you’re experiencing financial difficulties.
Can I go to jail for unpaid credit card debt?
In general, you can’t go to jail for having credit card debt. However, if there’s a lawsuit filed against you from a debt collection agency for the unpaid debt and you’re ordered to appear in court but don’t show up, you could have a warrant issued for your arrest. Just note that you’re protected from harassment by debt collectors by the Fair Debt Collection Practices Act (FDCPA).
Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to the Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn't include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.
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