Tips For Past Due Credit Card Bills

The longer you wait to contact your creditor, the less options you will have available to you.
i BananaStock/BananaStock/Getty Images

Ignoring your past due credit card bills won't make them go away. Instead, it will make them worse. When you have financial troubles and you can't make your payments on time, reach out to your creditor for your options. Once you know what's available to you, you can make the best decision on how to deal with your overdue debt.

Know Your Budget

Figure out your budget before you contact your creditors. Cover your basic needs first. For instance, make payments for your mortgage or rent, insurance, vehicle, utilities, food and gas. Also, payments for secured loans — loans for which you have collateral — should come before unsecured credit card debt. After you subtract the money needed for your basic needs and your secured loan payments, figure out how much you have left to pay your past due credit card bills.

Contact Your Creditors

Call your creditors and explain your situation as soon as possible. Creditors want to work with you to pay your debt, and they have solutions to offer you. However, if you ignore a creditor's attempt to contact you, the creditor may send your account to a debt collector. Creditors usually give up trying to contact you and send your account to a debt collector four to six months after you stop making payments, according to information in the book, "Solve Your Money Troubles: Debt, Credit & Bankruptcy" by Robin Leonard and Margaret Reiter. Once your account is in collections, you won't have the options your creditor can offer you. Also, the negative impact on your credit report will likely be greater.

Negotiate Payment Arrangements

For instance, if you have a past due bill, tell the representative that you want to pay the balance due, but you can't pay it in full at this time. Creditors often have a variety of payment arrangements to offer you, depending on your history with them. For instance, they may offer to divide the past due balance into equal amounts and tack those amounts onto your regular monthly payment for the next three months. However, never agree to payment arrangements that you know you can't meet. Don't hesitate to tell your creditor the amount of money that you can pay each month. Record dates, times and names in relation to who you speak with when you call your creditor. Also, write down the terms of the payment agreement you make with the creditor. If you can afford to pay off the past due amount when you call your creditor, ask the representative to remove any past-due notations from your credit report in exchange for paying the past-due amount in full. If the creditor refuses, make your payments on time for six to 12 months and then make the request again.

Follow Up

Stick to the terms of your payment agreement with your creditor. If you find that you cannot honor the terms, contact your creditor immediately and explain your situation. The creditor may still be willing to work with you. If not, you can expect that the creditor will send your account to a debt collector in the near future. If you find yourself in a situation where you can no longer manage your debts with a creditor, contact a reputable consumer credit counseling agency immediately. Credit counseling agencies can often negotiate with creditors for payment terms that include considerably lower payments and interest rates in return for your faithful payment.

the nest