What should I do if I can’t pay my credit card bills? | Consumer Financial Protection Bureau (2024)

FAQs

What should I do if I can’t pay my credit card bills? | Consumer Financial Protection Bureau? ›

If you can't pay your credit card bill, it's important to act right away. Contact your credit card company immediately. Many card companies are willing to work with you to change your payment if you're facing a financial emergency.

If you can't pay your credit card bill, it's important to act right away. Contact your credit card company immediately. Many card companies are willing to work with you to change your payment if you're facing a financial emergency.

Your lender will contact you to demand the missing payments are made. Then if you don't make the payments they ask for, the account will default. And if you still don't pay, further action may be taken, such as employing debt collection agents to recover the money you owe them.

If you default on your credit card debt and are unable or unwilling to work out an arrangement with your credit card company, you risk being on the receiving end of a debt collection lawsuit. Getting sued by a creditor or collection agency can be an unsettling experience, especially if you don't know what to expect.

If you do not make the payment after a stipulated period, they will close your account and report the default to the credit bureaus. This period may vary from one credit card provider to another. This tends to impact your credit score and it will be difficult for you to get approved for loans in the future.

Credit card companies rarely forgive your entire debt. But you might be able to settle the debt for less and get a portion forgiven. Most credit card companies won't provide forgiveness for all of your credit card debt. But they will occasionally accept a smaller amount to settle the balance due and forgive the rest.

While debt collectors cannot have you arrested for not paying your credit card debt, creditors can still use the legal system to make sure they get their money back. The most common legal recourse is to sue you for payment. If you get sued for unpaid credit card debt, don't ignore the lawsuit.

Can you go to jail if you can't pay your credit cards? ›

NO. You cannot go to jail simply for failing to pay your credit card debt. It is also illegal for creditors or debt collectors to threaten you with arrest or any kind of criminal penalty to try to get you to pay.

Credit card companies and debt collectors don't usually sue borrowers until their account has been in default for six months or more. In that six-month period, if you keep missing payments, the creditor will report them to the major credit bureaus and they'll be reflected on your credit report.

Consequences for missed credit card payments can vary depending on the card issuer. But generally, if you don't pay your credit card bill, you can expect that your credit scores will suffer, you'll incur charges such as late fees and a higher penalty interest rate, and your account may be closed.

Unfortunately, there is no such thing as a government-sponsored program for credit card debt relief.

Outside of bankruptcy or debt settlement, there are really no other ways to completely wipe away credit card debt without paying. Making minimum payments and slowly chipping away at the balance is the norm for most people in debt, and that may be the best option in many situations.

Credit cards can be frozen for many reasons, usually to prevent fraud or to stop yourself spending and racking up debt. Freezing interest charges is also possible if you are in financial difficulty, but will require a longer conversation with your provider about your affordability.

While you may be able to close an account with a balance — some issuers allow account closures for new charges while you pay off a balance — we recommend you pay it off in full. This ensures you don't forget about any balances or incur fees. You can also consider completing a balance transfer before closing the card.

Apply for a settlement via a formal letter in which you will again explain in detail why you can't pay the entire debt amount. The lender may decide on a lump sum settlement amount based on the severity of your circ*mstances. As part of the debt settlement process, provide the whole amount that your lender decides.

Does credit card debt go away after 7 years? Most negative items on your credit report, including unpaid debts, charge-offs, or late payments, will fall off your credit report seven years after the date of the first missed payment. However, it's important to remember that you'll still owe the creditor.