Telling your credit card company you can’t pay bills may not be a conversation you ever feel ready to have — but proactive and honest communication is key to minimizing the impact that not paying your bills could have on your financial life.
Throwing credit card bills away won’t erase debt. And, what you may not realize is that many issuers are willing to work with their cardholders on the issue. Here’s how to make what may seem like a difficult conversation with your creditor a little less scary (and hopefully, more productive than going into hiding) when you can’t pay your credit card bills.
1. Stick to the facts.
Emotions like frustration, fear and despair are common when you can’t pay bills — but getting to the facts quickly with your credit card issuer could help make a conversation more productive.
It’s helpful to provide an honest and succinct explanation about why you can’t pay your bills as agreed, and then to keep the conversation professional and based only on the facts.
2. Indicate how long your financial strain will last.
Once you’ve given a brief explanation of what has caused your financial hardship, provide an honest timeline about how long you expect to have difficulty paying your bills and how you are proactively working to resolve your financial situation.
3. Propose what you’d like to arrange.
If your financial strain is due to a temporary job loss, you may ask that your credit card issuer lower the minimum monthly payment or provide other help on your account for a few months.
If your financial strain is longer term, tell the creditor up front, and propose a realistic plan for paying as much as you can afford. And make sure you can afford to pay whatever amount your credit issuer is willing to accept by the date they specify.
4. Listen and take notes.
If a credit card issuer agrees to negotiate with you because you cannot pay your bills, ask for confirmation of the outcome you reach in writing, along with the name and contact information of the customer representatives you worked with. Some credit card issuers may not be willing to negotiate with you.
If the credit card issuer tells you any next steps you can expect as a result of not paying your bills — which may include the debt being placed with a collection agency — ask when this might happen.
5. Know when to seek credit counseling.
If you are unable to reach a resolution with your credit card issuer, try reaching out to a nonprofit credit counseling organization that’s affiliated with a national consumer advocacy group like the National Foundation for Credit Counseling or the Financial Counseling Association of America.