What should I do if I can’t make my Credit Card Payments?
You know this: missing payments on your credit card or paying late is a problem. Complications range from late fees, penalty interest pricing, and potentially damaging your credit score. But don’t worry, there is hope.
If you are not able to pay, you need to call your credit card company right away and tell them that you are affected by the pandemic or another type of hardship you might be experiencing. Types of hardship range from an illness or disability, divorce, unemployment or a natural disaster, to financial difficulties caused directly or indirectly by coronavirus.
Many credit card companies and banks can help you get through this time of hardship, and avoid long-term financial complications. Through their programs you might:
- LOWER OR DEFER YOUR MONTHLY MINIMUM PAYMENT
- AGREE TO A SPECIAL PAYMENT PLAN
- CANCEL OR RECEIVE A REFUND FOR LATE FEES
- REDUCE YOUR INTEREST RATE TEMPORARILY
Here are some examples of relief programs offered right now, amidst the coronavirus pandemic:
While their program doesn’t allow for a payment suspension, it may offer a reduction in monthly payments and interest fees. You could also prevent accounts from going past due. Your credit card limit could be reduced, unless already maxed out, and you may need to bring your balance below the limit before being able to make new purchases.
Under their deferment program you could delay three monthly credit card payments by enrolling online. Just remember that interest will still accrue on your unpaid balances, and that you can only request a payment deferral once per credit card account.
They have a program to suspend payments and to exempt you from paying some fees. They can defer monthly payments for two consecutive billing cycles on eligible credit cards and personal lines of credit accounts. Keep in mind that during the deferment period, interest accrues and will be added to the unpaid balance once the assistance period ends. While enrolled in their program, you can continue using your credit card as long as it stays within its credit limit.
Upon request, their program exempts you from paying late fees. It also frees you, for two consecutive billing cycles, from the obligation of making the minimum payment due shown in your billing statement. You may not be eligible for relief if you are already participating in an active hardship or forbearance program, or if you are more than 60 days past due.
They can offer a deferral on your credit card payments upon request and on an individual basis, but you need to contact them to know exactly what they can offer.
Despite how difficult your situation might be, there is no need to panic. Many financial institutions, such as banks and credit card companies, offer relief programs that could give you some breathing room. Just be sure to contact them as soon as you know you won’t be able to pay your credit card, to avoid negative consequences on your credit report.
Be aware, your enrollment in relief plans could be reported to the bureau, and while it might not directly impact the FICO score as much as late payments would, other lenders could see this as a sign of temporary hardship and avoid extending additional credit.