Americans currently hold a record amount of credit card debt — just over $1.2 trillion. Adding to the difficulty are rising interest rates, with the average credit card APR hovering over 20%.
All of this has made ends tough to meet. If you can't pay your credit card balance, there are options available before resorting to debt consolidation or debt relief.
Here are three steps to take if you're struggling to pay your credit card bills each month.
What to do when you can't pay your credit card bills
Offers in this section are from affiliate partners and selected based on a combination of engagement, product relevance, compensation, and consistent availability.
According to National Debt Relief, clients who complete its debt settlement plan can reduce their enrolled debt by an average of 20% to 25%, after fees.
Freedom Debt Relief has resolved over $20 billion in outstanding debts since 2002. It offers free credit card debt relief consultations.
Call the card issuer
As soon as you think you can't make a credit card payment, reach out to your credit card issuer. Late payments for credit cards typically don't show up on your credit report for at least 30 days, so you may have time to put together a plan.
Explain your situation to your bank or credit union and see what options are available. Ask whether the issuer has hardship programs, and note any specific expenses or life events, like unexpected medical bills, funeral expenses, a job loss or reduced income. You may be able to defer or delay the payment, especially if this is the first time you've been unable to pay. There may be options to temporarily reduce your interest rate, as well.
If you can work out a solution with your card issuer, you'll want to get it in writing. Be sure you understand the fine print so you know what you're getting and what you need to do to hold up your end of the deal.
Seek financial help
Programs exist to help pay certain expenses, such as food and utilities, which could free up the cash you need to pay your credit card bill. To find and apply for assistance that's available in your area, reach out to your local and state governments and ask who you can talk to about receiving help to pay your bills. United Way operates the 2-1-1 hotline, which you can call and get connected to local organizations that provide help with housing, food, healthcare, employment and more.
To understand all of your options for addressing your debt, you can also work with a credit counselor. Reputable credit or debt counselors can be found through organizations such as the National Foundation for Credit Counseling (NFCC) and the Financial Counseling Association of America (FCAA). Generally, these services offer no- or low-fee advice initially, and fees apply depending on which (if any) services you use.
Make a plan
Assessing your income and expenses and setting up a budget may not help you as much as you'd like in the short term, but these steps are vital to maintaining your long-term financial health.
There are plenty of budgeting apps and free budgeting tools that can help you, but whichever tools or systems you use, it's important to understand how much money you have coming in and where it's all going. Once you understand where you're spending money, you can start making choices based on your priorities. There may be subscriptions you no longer need or expenses that have low- or no-cost alternatives.
Having a system in place to track your spending is helpful. This way, you can stay on top of your bills throughout the month, instead of waiting until the end and hoping it works out.
Can 0% intro APR credit cards help?
No-interest credit cards can be a great way to give your debt repayment plan a boost, especially when average credit card interest rates are high. Today's high interest rates make 0% intro APR credit cards very appealing.
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It's an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
5%, min: $5
Foreign transaction fee
3%
The biggest hurdle with 0% APR credit card offers is that you'll typically need good to excellent credit to qualify. If you already missed a credit card payment, you may not be eligible for these cards. Also, even if you're eligible for a 0% APR card, you should still have a plan in place to repay your debt. Once the no-interest period expires, the standard APR applies to your card balances.
Find the best credit card for you by reviewing offers in our credit card marketplace or get personalized offers via CardMatch™.
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