You’ve known it for a while now, but reality has just hit you. You cannot make your minimum credit card payment this month. Whether an unexpected cost exhausts your budget, you will be over a period of financial difficulty, or you are simply being spent, it will happen to the best of us at one time or another. How you deal with it can affect your credit rating, so it is important to proceed wisely.
Don’t just skip it
If you don’t make your monthly credit card payment, the absolute worst thing you can do is just leave the bill unpaid. Your minimum skipping payment will only make it more difficult to catch up, and you will have to deal with some not so pleasant consequences. Your creditor can take certain measures, such as charging a late fee or notifying late payment to the credit bureaus if your payment is 30 days past due.
A missed payment brings you closer to the highest penalty rate with the interest rate increased. The credit card issuer can legally apply the penalty rate to your scales if you make two payments – that is, they become 60 days past due. Depending on your credit card terms, the penalty rate may apply to other credit cards you have with the issuer. Even worse, the penalty rate may apply to new balances indefinitely.
Avoid falling for the “one dollar minimum payment myth” that suggests you can send a little less than your minimum payment to meet your monthly payment obligation. Contrary to what you haven’t read or heard from credit card companies withholding penalties, only because you have an effort to pay. You must pay at least the minimum payment or make other payment arrangements with your credit card company so as not to be rated late or have your interest rate increased.
Make some extra money
It can be something you can do in the short term to bring in additional income. Do you have a skill or service that you can provide to others? Try to pick up some free work on Odesk or Fiverr. Are there things around the house you can sell? Put them on a local Facebook marketplace, Craigslist or eBay. You can go for a ride sharing service like Uber or Lyft. There are a number of creative ways to quickly make cash sales things or provide services to others. You just have to be willing to think outside the box and put in the work.
Talk to your creditor
If you don’t have time to get your minimum cash payment, call your card issuer and explain the situation. Let them know that it is a one-time occurrence and let them know when you will be able to make your next payment. Some creditors will extend their due date, waive the late fee and continue reporting a “current” payment status to credit bureaus.
Not every credit card issuer will be likable. If your credit card issuer is not ready to work with you, try looking for money elsewhere in your budget. Is there any way you can cut your expenses this month? Maybe you can borrow from a friend or family member, or get a little progress from your employer on your next paycheck. See how to get money to pay your debts for some ways to come up with cash to make your payments.
Be careful juggling your bills
One could be tempted to defer payments to other bills, but there could be ramifications. For example, if you don’t pay on your electricity bill, face your services separately.
This is a great time to check your costs to see if you reduce or eliminate some bills. Can you cut your cables or get rid of the internet? Choose a less expensive cell phone package? Ask your insurance companies for lower prices? Do some personal care services waive for a few months? Consider everything you spend money on and decide if it’s something you can do without, at least temporarily.
How To Make a Missed Payment Up
If the worst happens and you miss your due date, make the payment as soon as possible. You can avoid late reporting by adding payment to your credit report before it is 30 days past due. Also, before you roll out your next due date, keep paying off to double on payments in a single month. You will still be charged a late fee, but your credit score will be safe.
You don’t have to call your credit card company to make your payment – unless you want to ask to be waived for your late fee. You can make your payment online, by post or by phone as usual.
If your payment is printed after your testimony, the payment will not show on your bank statement. Check your online account to verify that your payment is posted and check the minimum payment you need to make the next due date.
Where can you get professional help
If you find that you are consistently having problems with your minimal payments, consider credit counseling. A credit counselor can help you figure out how to restructure your budget or negotiate lower monthly payments with your creditor. Your credit card statement contains a number that you can call if you are experiencing financial difficulties. Alternatively, for credit counseling at the National Foundation, you can find a credit counseling agency near you.