What to Do If You Can't Make Credit Card Payments

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Credit card debt has become a significant problem for both young and old. In fact, according to a 2009 study, the average balance on an undergraduate's credit card is $3,163, while 21 percent of undergrads had balances between $3,000 and $7,000. While these numbers seem high, especially considering that undergrads are barely old enough to get a credit card, things look worse for the average family. In fact, according to an article on CNN Money, average American families with at least one credit card had almost $15,950 in credit card debt.

Credit card debt is almost universally considered bad debt because consumers use credit cards to buy things they do not appreciate (go up) in value. These consumers are then stuck paying interest on items they have already consumed or declined in worth. While most experts suggest paying off credit card debt as quickly as possible and not carrying a balance for these reasons, the fact remains that many are struggling and cannot simply repay their credit card debts in full. Worse, some people cannot pay their credit cards and are left wondering what to do if they cannot make a payment.

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What to Do If You Can't Make Credit Card Payments

If you cannot make credit card payments, you must take some action. If you stop making interest payments and do nothing, you will deal with aggressive debt collectors calling your home. You'll also end up with black marks on your credit month after month as the creditors repeatedly report that you are late or not making payments. The longer you go without making a payment, the more damage you'll do to your credit score, and the worse things will be.

While you should always do something, the specific type of action you should take if you can't make your credit card payments varies depending upon your financial situation, how much you owe, your current credit score, and why you can't make your payments. Some possible options if you cannot make your credit card payments include the following:

Contact your creditor to find out about entering into a payment plan or about putting your payments into deferment temporarily.

If you are facing a short-term financial setback but expect to get it under control soon and to be able to pay your debts shortly, this can be the best option. While credit card companies won't always be willing to let you skip a payment or to let you renegotiate your payment amount or schedule, some will- especially if you've been a good customer and if the creditor believes it is better to work with you so that they can receive their money in the end.

Consider a debt consolidation loan.

This can be an option if you have money and can make payments on some debt, but if you cannot afford to make your debt payments because the interest rates are too high or because you have too many cards with minimum payments that are too high. Taking a new debt consolidation loan and repaying your old debt can make debt payments more manageable since you may be able to get a longer repayment term, a lower interest rate, and a lower monthly payment.

Settle your debt.

Settling your credit card debt is a bankruptcy alternative. While it does damage your credit, it typically is not as bad as bankruptcy, and you may even be able to negotiate with your creditors to avoid having them report the debt as settled on your report. Settling means you get the credit card company to agree to accept a lump-sum payment for less than the total amount of the balance that you currently owe on your card. Creditors may be willing to do this if you are several months behind, and if they fear that otherwise, you won't pay anything at all. Remember to get your settlement offer and agreement in writing BEFORE you send money if you decide that this option is right for you.

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One of these options may be the answer to helping you resolve your debt problems if you cannot pay your credit card debt. However, it is essential to choose the right option for your situation and understand your choice's implications on your financial future.


Thank you for reading and hope you have a good rest of the day!

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3 comments
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Credit cards are designed to trip you up, but are essentially vital in modern day society. Because you need a good credit rating to enter any long term agreement such as a mortgage. Crypto should fix this!

A top tip is to never ever rely on a credit card, limit it to 10-20% of your monthly spending, pay it off in full each month, and keep 3+ months in savings for emergencies.

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