Pay at least every minimum, find a small fixed extra amount, and call your card company early if you are struggling. The Consumer Financial Protection Bureau says to contact the issuer as soon as possible if you might miss a payment; hardship programs may lower the payment or rate, and you should get any new plan in writing. ProfitDrawer's free loan payoff calculator shows how much an extra $25 a month changes your payoff date.
Steps when money is tight:
- List every card: balance, interest rate and minimum.
- Pay every minimum on time to avoid late fees and penalty rates.
- Find a small, steady extra amount, even $20 or $25, by trimming one category in your budget.
- Send the extra to one card. The highest rate saves the most interest; the smallest balance gives a quick win. When it is paid off, roll its payment to the next card.
- Stop adding new charges to the cards you are paying down.
- Call the issuer early. The CFPB says hardship or forbearance programs may let you postpone payments or pay a lower monthly payment at a reduced rate. Get written confirmation.
- Consider nonprofit credit counseling, which the CFPB says can work with you and your creditors on a debt management plan you can afford.
Be careful with debt settlement: the CFPB warns these companies often charge high fees and tell you to stop paying your bills, which can bring late fees, penalty interest and lawsuits. Avoid any company that charges fees before it settles your debts.
General information, not financial advice.
Source: Need help with your credit card debt? Start with your credit card company (Consumer Financial Protection Bureau) · Updated
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General information, not tax, legal or financial advice. Check the rules for your state and your situation.