Before we can really address how to get out of this mess, it’s important for you to take a step back and determine what caused all this in the first place. You have to address the problem and learn from it, so it never happens again.
If you get into a situation where you have credit card debt and can’t make the monthly payment, the first thing you should do is cut up the credit card and close the account. Regardless of if it is a temporary life circumstance that made it difficult to pay or whatever the situation may be, cut up the card. You don’t need it right now.
Let’s walk through the stages of what happens if you go into credit card debt and can’t pay…
1. A Few Days/Weeks Late – The credit card company won’t throw a hissy fit over you being a few days or weeks late with your payment. In fact, my guess is they kind of like it, because they ding you with a big $30-$50 late charge.
- If This Happens To You…If you have the money and were just irresponsible getting your payment in on time, pay it and then call them to request the late charge be taken off. Assuming you’re a good customer and don’t have late payments all the time, most companies won’t have a problem taking this charge off. But they won’t take it off if you don’t ask. If you’re in a financial bind and don’t have the money, just let it go for a few weeks until you have the money.
2. 1-6 Months Late – During this time, you will continue to rack up late fees and interest charges. If you’re not careful, things can really spin out of control and you can end up with a bigger mess on your hands than you expected. Usually by 180 days of non-payment, credit card companies consider you to be ‘delinquent’ status, which basically means you haven’t kept up your end of the bargain by making your payments. It’s important to note though that considering the current economic conditions, more companies are changing people to ‘delinquent’ status after only 90 days of non-payment, not 180 days.
- If This Happens To You…Be in contact with the credit card company. Call them and let them know what’s going on. Don’t offer some sob-story…they don’t feel sorry for you. Offer a solution. Can your minimum payment be lowered? Can they drop your interest rate a little bit to give you some breathing room? In general, companies are likely to work with someone who is behind when they’ve reached out to communicate rather than just hiding from the problem.
YOUR 2 CENTS – Have you had any experience with not being able to make your monthly payment on a credit card? What happened?
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