Can’t Make Minimum Credit Card Payments?

Nov 30, 2011 by

Money is like food: If you don’t have enough, while you’re working on getting more, you have to ration your supply. And like hungry children, your credit card companies will howl if they don’t get what they want: A full tummy in the form of their minimum monthly payment.

How to Ration Money

If you don’t have the cash to meet every minimum monthly payment, then you have to decide how to divvy up the funds you are able to spend on credit card debt repayment. Consider:

  • The greater number of accounts you can keep current, the better. Pay first those with the smallest minimum payment and work your way up until you run out of cash.
  • If you can’t make at least the minimum payment, don’t make a payment at all.
  • For accounts you cannot pay, call the lender. Get the representative’s name, explain your situation, and take notes. Emphasize any extraordinary circumstances—a wage earner was laid off or called up for military service, for example. Tell the lender that you’ll resume paying not by a certain date but rather as soon as you can.
  • Lenders may offer a “hardship plan” with a lower minimum payment or other concessions. If you can’t afford the lower payment, then politely decline and repeat that you’ll start paying when you can. If you can afford the hardship payment, ask for documentation specifying your new minimum payment, interest rate, and the date the hardship plan expires. A handshake deal over the telephone is worthless. No documentation, no deal, period.

Once you’ve finished this cash rationing, if calls from creditors’ collection departments increase your stress level, don’t take their calls. You don’t have to talk to them!

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