Contact your card issuer before the payment is due
If you know you cannot make a payment, call the card issuer's customer service number on the back of your card or on your statement. Do this before the due date, not after. Tell them you are having trouble making the payment and ask what options they offer.
Many issuers have hardship programs that can lower your interest rate, pause late fees, or reduce your monthly payment for a set period. These are real programs with real terms — not favours. The issuer would rather restructure your debt than send it to collections, because a collected debt costs them money too.
When you call, have your account number and a rough idea of what you can pay ready. Be honest about your situation. The representative will tell you what your issuer can do, and you can decide whether to accept.
Key Takeaways
- Calling before your payment is due gives you more options than calling after you have missed a payment.
- Most card issuers have hardship programs that can lower your rate, pause fees, or reduce your payment temporarily.
- A late payment stays on your credit report for seven years, so preventing one is worth the phone call.
- If you cannot pay the full balance, paying something by the due date is better than paying nothing.
- Debt management plans through non-profit credit counselling agencies can restructure multiple cards at once.
Understand what happens if you miss a payment
A payment is late if it arrives after the due date shown on your statement. Most issuers charge a late fee (usually $25 to $40 for the first late payment) and may raise your interest rate. After 30 days late, the late payment appears on your credit report and begins to damage your credit score.
After 60 days late, the damage is worse. After 180 days (six months) late, the issuer typically closes the account and may sell the debt to a collection agency. At that point, a collector can contact you, and the debt becomes much harder to resolve.
The late payment itself stays on your credit report for seven years from the date it first became late. This affects your ability to borrow money, rent housing, or sometimes even get a job. Preventing a late payment is worth the effort.
Pay something, even if it is not the full amount
If you cannot pay the full balance by the due date, pay whatever you can. A partial payment is recorded as on-time and stops a late fee from being charged. It also shows the issuer that you are trying to meet your obligation.
After you make a partial payment, contact the issuer again and explain the rest of your situation. Many will work with you on the remaining balance if they see you are making an effort. Some will set up a payment plan for what you still owe.
Paying $50 on a $500 bill is not ideal, but it is far better than paying $0 and triggering a late fee plus interest rate increase plus credit damage.
Look into a debt management plan
A debt management plan is an agreement between you, a credit counselling agency, and your card issuers. The agency negotiates with each issuer to lower your interest rate and sometimes reduce your total debt. You then make one monthly payment to the agency, which distributes it to your cards.
These plans are offered by non-profit credit counselling agencies, many of which are accredited by the National Foundation for Credit Counseling (NFCC). The agency typically charges a small monthly fee ($25 to $50) that comes out of your payment. The plan usually takes three to five years to complete.
A debt management plan does appear on your credit report and may lower your score slightly at first, but it shows future lenders that you are working to repay what you owe. It is often better for your credit than missed payments or collections.
To find a non-profit agency near you, visit the NFCC website or call 1-800-388-2227. They can tell you whether a debt management plan makes sense for your situation.
Know the difference between hardship programs and debt settlement
A hardship program through your card issuer restructures your existing debt — lower rate, lower payment, or paused fees. You still owe the full amount, but the terms change. This is offered by the issuer directly and costs you nothing.
Debt settlement is different. A settlement company negotiates with your issuer to accept less than you owe — say, 40% of the balance — in exchange for a lump sum payment. Settlement damages your credit score more than a hardship program, and it can take years. Settlement companies often charge high fees (sometimes 15% to 25% of the amount they settle).
Do not confuse the two. A hardship program is a first step. Debt settlement is a last resort, used only when you truly cannot pay and have exhausted other options.
Avoid payday loans and credit card cash advances
When you cannot pay a credit card, you might be tempted to take out a payday loan or use a cash advance on another card to cover it. Both are traps. Payday loans charge interest rates of 300% to 400% per year. A cash advance on another card charges an when ready fee (usually 3% to 5%) plus a higher interest rate than regular purchases.
Both options make your situation worse, not better. You end up owing more money at higher rates. If you are considering either one, call a non-profit credit counselling agency first. They can often find a better path.
Frequently Asked Questions
How long do I have after the due date before it counts as late?
Most issuers allow a grace period of 21 days after the statement closing date before charging interest on new purchases, but the payment due date is set earlier. If your due date is the 15th and you pay on the 16th, it is late. However, many issuers do not report a late payment to the credit bureaus until it is 30 days past due.
Will a hardship program hurt my credit score?
A hardship program may lower your score slightly when you first enroll, because it shows as a modification to your account. However, it is far less damaging than missed payments or collections. Your score typically recovers as you make on-time payments under the new terms.
Can I get out of a debt management plan if I get money later?
Yes. You can pay off the plan early if your situation improves. There is usually no penalty for early payoff. Contact your credit counselling agency to discuss your options if your circumstances change.
What if I have multiple cards I cannot pay?
Call each issuer separately to ask about hardship programs, or work with a non-profit credit counselling agency that can contact all of them at once. A debt management plan can cover multiple cards and may be simpler than negotiating with each issuer individually.
Does not paying a credit card affect my other debts?
Not directly. A missed credit card payment does not automatically affect a car loan, mortgage, or student loan. However, it does damage your credit score, which can affect your ability to refinance other debts or borrow money in the future.