You haven’t been able to pay your credit card bill. Maybe once or twice. Maybe four times or more. And you know they’re going to start calling soon. Plus, your credit score is bound to take a hit. What should you do?

credit card payment
  • First of all, take a breath. Maybe two or three. About as much as you can right now to keep your heart rate down. The first rule of getting out of debt is to not panic. You won’t be able to think clearly and plan your next steps if you’re hyperventilating and your mind is scrambled.

  • Second, talk to your credit card company. Let them know your current financial status. They can’t help you if you don’t ask. Working together, you might be able to come up with a payment plan you’ll both be happy with. If you’re lucky, they might lower your interest rate or even get some of the late fees removed. There’s still a chance that you still end up paying some late fees and interest on your debt but it will definitely be more manageable than what you started out with.

  • Third, increase your income. You already know how much money you have. And you know you can opt for alternative financing methods just to stay current on your payments. Now, this is a good option if you know you’ll have enough money to cover the loan plus interest once the payment is due. But this option is merely a stopgap, not a permanent solution. Look for other sources of income like a garage sale or a side gig. More money means less problems when it comes to being debt-free.
  • Fourth, take a good long look at how much you owe, how much you have, and your options on where to get the money. It may be tempting to get an online payday right away to cover the bill but let’s not be hasty. Just do an assessment first to see where you stand.

  • Fifth, cut down on your costs. You probably already are but this step bears repeating. It might take a number of mac and cheese nights, ramen breakfasts, and brown bag lunches but the end goal would be oh-so-worth-it. It will mean skipping those fancy lattes from that coffee shop you love and trying to find more inexpensive ways to spend time with friends and family. Every little bit of savings you can make will count. You might feel like a Scrooge, hoarding all your money, or a paper (which you technically are) because you can’t seem to afford a decent burger anymore. But when you get to save all that money and pay off a chunk of your debt, it’ll taste better than any fancy coffee or gourmet burger you’ll ever have.

  • Sixth, never stop paying your debt until it’s all gone. While it may be tempting to just ignore your debts once it goes into collections because your credit score is shot anyway, just keep swimming. Some of the newest credit-scoring models employed by some lenders are designed in such a way that clearing your debt may have a really positive impact in your credit score. In any case, paying your debt is the adult thing to do and puts you one step closer to financial freedom.