When You Can’t Make the Minimum Payment Due
Most of us know that not paying your credit card debt can lead to trouble very quickly. But what happens if you can’t afford to pay the minimum amount due? In this article, we’ll talk about how to smartly handle things should you find yourself in such a situation.
What’s The Worst That Can Happen If I Don’t Pay The Minimum Amount Due
If you know you’re not going to be able to make the minimum payment for a particular month, we urge you to contact the credit card company ASAP. You may be able to work something out with them. At the minimum, being proactive in contacting them is always a good move. If you miss just one or two payments, any potential damage to your credit score should be minimum. However, if you miss three payments, your credit score is going to take a serious ding – perhaps as much as up to 125 points! If you continue to miss payments, you’ll likely be facing some form of legal action.
Reduced Minimum Payments May Be An Option
If you’re going through an especially bad time, your credit card issuer may reduce your minimum payment for a period of time. Known as a hardship program, many credit card issuers are willing to work with you during tough times, such as unemployment or high medical bills. They may also be able to lower your interest rate, which should reduce your monthly minimum payment due.
Paying Less Than The Minimum Amount Due
Creditors will most likely accept whatever amount you send them. Just because they accept it, however, doesn’t mean that your debt for that month is satisfied. In actuality, paying less than the minimum has virtually no effect on your bill whatsoever.
Steps to Recovery
After you’ve made things current with your bill, you’ll need to begin covering up for the damage done to your credit score. One of the best ways to do this is by opening a credit card account. Because the credit card usage is reported monthly, this is your chance to show that you’ve learned to be fiscally responsible – even if you do not make a single purchase on the new card.
Bankruptcy May Be a Good Option For You
If you’re having trouble making financial ends meet, trust us: you’re not alone. Among the options available to you is bankruptcy. In most cases, bankruptcy will not affect your retirement accounts, and will protect you from the weight of crushing debt. Because no two situations are alike, you’ll need the expertise of a skilled bankruptcy attorney with Statewide Bankruptcy. We encourage you to call our offices today at (602) 225-2222 for a free consultation.