Can’t Afford Your Minimum Payment? How to Handle Rising Credit Card Debt

4222474443_a5e2ebaabeImage courtesy of meddygarnet

If you’ve recently received a credit card bill in the mail and realized that even the minimum payment is more than you can afford, your first reaction may be to panic. First things first: as soon as you realize that you’ll be unable to make a payment, make every effort to get in touch with your credit card company’s customer service department. If you’re in this situation because you’re experiencing some unexpected and temporary financial distress, be up front with them and ask to have your payment due date moved back a few weeks just this one time. Also, if this is your first infraction, keep reminding them that you have always paid your bill on time and that you plan to straighten out your current situation ASAP. Request that any late fees be waived due to your impeccable behavior as a cardholder in the past. It is always best to speak directly with your credit card company as soon as you realize you will miss a payment. Emails can go unanswered, so bite the bullet and pick up that phone. Being proactive gives the lender confidence that you really do want to make good on your debts.

Assuming that you really do have a good track record with this credit card company, they may be inclined to help you work out a very temporary situation that will allow you to get back on track with regular payments next month. If they’re not willing to budge, you’ll have to prioritize your bills in order of importance. Recurring bills that must be paid first include: mortgage/rent, health insurance, food and medicine for you and your family members, car insurance, car payment/lease payment, and utility bills such as electricity, gas and water. Never forsake any of these bills to pay a credit card bill because the ramifications of missing any of the aforementioned, will be much more severe than missing a credit card payment.

If your “temporary” lack of funds is going to last longer than the immediate future, you’ll also have to take a good, hard look at how you’re spending the rest of your money.

If you haven’t already done so, set up a monthly budget. Write out all of your expenditures versus all of your income, including what you make and/or spend each month in cash. This will act as a visual aid, and will enable you to determine where you can reduce spending. Non-necessities such as cable/satellite TV, internet access, cell phone packages, satellite radio subscriptions, magazine subscriptions, Netflix, dining out and other entertainment should be reduced to the bare minimum until you’re able to pay all of your monthly bills and have some money left over.

Take a look around you and determine if you have anything of value to sell. It may sound tacky, but what’s the point of holding onto something you never use if selling it means saving your credit? You can get ideas on sites like eBay and Craigslist for the things people want to buy. You may have a real money maker stashed away in your attic.

If budgeting and cutting back on luxury expenses, along with selling a few valuable items isn’t enough to dig you out of the money pit you’ve fallen into, you should consider contacting a bankruptcy attorney in New Jersey. Doing so may seem like a step in the wrong direction, but who better to help redirect your financial inertia than someone who expertly handles these issues on a day-to-day basis? Being in over your head isn’t a fun place to be. Let this be a learning experience for you so that you never find yourself living beyond your means again. Be proactive now so that you can secure a future with less money stress. It won’t be a fun process to get back in the black, but with perseverance and the courage to ask for help, you’ll be out of the red soon.

6 Responses to Can’t Afford Your Minimum Payment? How to Handle Rising Credit Card Debt

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