What To Do If You Can’t Make A Credit Card Payment
What should you do when you can’t make a credit card payment? That’s exactly what many Americans are left wondering in the wake of the COVID-19 economic crisis. Whole industries have ground to a halt, companies are laying off swaths of employees just to stay afloat, and the future seems uncertain for almost everyone.
Many people are dealing with the loss of their job, unexpected bills, or overall financial insecurity. Here’s what you need to know in order to minimize the impact on your credit score and potentially avoid additional late or nonpayment fees.
What happens when I can’t make credit card payments?
Most major credit card companies deal with late payments or nonpayment in the following ways.
If payment is simply a few days past due:
The creditor is likely to charge a late payment fee. You can expect a one-time late fee to fall somewhere in the range of $20-40. Fees for additional late payments in subsequent months will likely be higher. As long as you pay your bill within 30 days of its due date, your creditor should not report the late payment to the credit bureaus, and your credit scores should not be affected.
If a payment is 30 days overdue or more:
Often, credit card companies report late payments past the 30-day mark to each of the three credit bureaus. If you check your Experian, Equifax, and TransUnion scores after a late credit card payment, you should expect to see a point deduction.
In turn, your lower credit bureau scores will be reflected in your FICO and VantageScore ratings.
If you skip payment entirely for more than 60 days:
Missing your payments for more than two consecutive billing cycles generally results in your credit card company deeming your account to be delinquent. Delinquent accounts are subject to even higher credit score penalties.
Missed payments and delinquent accounts are likely to incur higher interest rates as an additional penalty. Credit card companies may charge several extra percentage points of interest on top of your normal interest rate.
What should I do if I can’t afford my next credit card payment?
If you can afford to make at least the minimum payment within 30 days of the due date, you are better off making the payment late rather than not at all. Even if you can’t make your credit card payment within the first 30 days, try to pay your bill within 60 days to avoid the creditor deeming your account delinquent.
One or two late payments may be forgiven as long as you are able to catch up. You might even be able to contact your credit card company and ask them to remove a single late payment from your record if you have otherwise maintained a good payment schedule.
What are my options if I can’t make any credit card payments at all?
Past a certain point, you may feel unable to settle all of your debt on your own without help. This is where a credible debt help company may be your best bet.
Certified debt help companies such as UmbrellaDEBT Relief will take a look at your financial situation and can help you understand if options like debt settlement or other types of debt relief would fit your needs.
Debt settlement may not be appropriate for all consumers. However, it is often the best option for people suffering under the weight of huge amounts of debt that they can’t possibly pay off if they have a financial hardship.
UmbrellaDEBT Relief’s debt settlement program may be able to negotiate your debt down to as little as half of what you owe in some scenarios, every consumer’s situation is unique though. You may be able to make one lump sum payment at a fraction of your total outstanding debt to a particular creditor or continue paying on a payment plan in structured settlement. Once your debt is settled, you can begin to start fresh and rebuild your life and your credit score starting from a clean slate.
Call today or contact us online for more information.