If you’re finding it difficult to keep up with your credit card payments, you should know most of the credit card companies are willing to work with cardholders. Each company has it’s own method of modifying your credit card payment plan, but here are some examples of what you might be able to do if you talk with your credit card companies:
Lower Interest Rates and No Late Fees
Many credit cards will temporarily offer you a lower interest rate with no late fees to help you get back on your feet. This will allow more of your monthly payment to go toward principal balance and less toward interest. To avoid late fees, the credit card company will likely require that the payments are made automatically through your checking or savings account.
Lower Minimum Payment and No Late Fees
Some cards will temporarily offer a lower minimum payment. Usually, if you send less than the minimum payment you’ll get hit with finance charges and late fees because it’s considered unpaid. On an alternate repayment plan, you can send a lower minimum payment without fear of getting socked with fees. The temporary lower payment is good for six months or twelve months, depending on the company who sets it up for you. If you get this option, they may also require that your payments are made automatically through your checking or savings account.
Credit Card Settlement
In some cases, people with high credit card debt might want to consider settling the debt. Credit card companies will often accept an amount of money that is smaller than the total balance owed to close the account and considered it paid off, if they feel you are in danger of bankruptcy. If you file bankruptcy, often the credit card companies won’t get anything from you at all, so it’s in their best interest to agree to settle the account. In order to settle though, you usually need to have the money available up front to pay it off as soon as they agree to your settlement amount. You can no longer make payments – you just have to pay the amount in full to close the credit card account. This option has a negative affect on your credit score usually, although some people find that simply removing large amounts of debts from their credit report through settlements ends up helping their credit scores.