What to Do When You Can’t Pay Credit Card Bills

woman on phone
Credit card debt can make you feel like you’re drowning. | Ridofranz/iStock/Getty Images

Do you feel like you’re drowning in credit card debt? If so, you’re not alone. Overall, American consumers owe more than $1 trillion in revolving debt, according to the Federal Reserve. Furthermore, according to Experian data, the average credit card balance is $6,354. Consumers have an average balance of $1,841 on retail credit cards.

If you’re experiencing financial difficulty, don’t get down. Tough times can happen to anyone. The important part is that you do something about your situation instead of ignoring the problem and hoping it will go away.

Here’s what to do if you can’t pay your credit card bills.

Look at your habits

What are your financial habits like? It’s easier to learn where you need to make changes if you make an effort to analyze how you handle money on a daily basis. Your primary issue could be overspending. If this is the case, you’ll need to assess your spending habits, so you can find areas where you need to cut back spending. Monitor your spending for at least 30 days to see where your money is going and how much you’re spending. From here, create a budget so you won’t overspend.

Bring in extra income

After you’ve analyzed your spending, if you’ve concluded there’s not much more you can cut back, it’s time to consider getting a side hustle. There should be more money coming into your household than going out. An extra job can quickly solve this problem and help you pay down outstanding debt. According to Bankrate research, it’s possible to earn more than $8,200 within a year. If you decide to work a second job at least once per month you can earn an average of $836 monthly.

Contact the credit card company

If cutting back and earning additional income still aren’t helping you pay make your monthly credit card payments, it’s time to speak up. Contact the credit card company and explain your financial situation. Ask to be connected to the hardship department. Many credit card companies have financial hardship programs that might be able to assist you with paying down your debt. You might be able to get an interest rate reduction or modified payments, especially if you’ve recently experienced job loss or a major illness.

Seek credit counseling

If your credit card company is unable (or unwilling) to help you, there are still other options available. Your next step should be to get in touch with a consumer credit counseling agency. A credit counselor will evaluate your financial situation and help you decide the best course of action. He or she might recommend enrollment in a debt management program.

These plans help you pay down debts owed to your lender. Through this program, your lender might reduce or waive finance charges or fees. This way, you can pay off your debt faster. It takes roughly three to five years to complete a debt management program.

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