Alright, so you’re late on a credit card payment. That’s not great, but it’s not the end of the world, and there are some things you can do right now to make it better. The most important thing to remember is that the problem is not going to go away; the longer you wait, the worse it will get. Here are five tips to stay afloat once you’ve missed a payment.
- Act now. If you take steps to fix the problem early, you might get away with just paying a fee. If you wait longer, you might also end up paying a higher interest rate, losing your rewards, and taking a negative hit to your credit score.
- Make the minimum payment if you can. Your credit score will go down by a lot less if you can at least pay the minimum amount due. Try to temporarily spend less to make this possible, and definitely don’t charge any new purchases to your credit card.
- Call the credit card company. Having a polite and sincere conversation with your credit card company can actually go a long way. Trust me, this isn’t the first time they’ve had to deal with this. If you let them know why you missed the payment and how much you can actually pay, they can often work out payment plans, waived fees, or temporarily lower interest rates to help you get back to paying in full and on time. The trick here is to be nice, be honest, and call early. If you know you’re going to be late, you can even call in advance.
- Look into a transfer card. Balance transfer cards are credit cards that let you get all your debt into one place where (at least temporarily) you don’t have to pay interest. They’ll charge you a fee, but depending on your balance and your existing interest rate, this still might be the cheaper option.
- Seek help from a credit counselor. Listen, this whole process can get pretty complicated, especially as more time passes where you haven’t made your payments. You may reach a point where your interest rate and debt is so high that it feels like you’ll never be able to pay it off. Credit counselors are experts in these problems and can help make things manageable again. Stay tuned for information on how to evaluate credit counseling agencies.