Contact Your Card Issuer Before the Payment Is Due

Call the customer service number on the back of your card as soon as you know you cannot make a payment. Do not wait until the due date passes. Card issuers have hardship programs designed for people in temporary financial difficulty, and they are far more willing to work with you before you miss a payment than after.

When you call, explain your situation clearly: job loss, medical emergency, reduced hours, or whatever applies to you. Ask specifically whether the issuer offers a hardship program or payment deferment. These programs may lower your interest rate, reduce your minimum payment, or pause interest accrual for a set period — typically three to twelve months. The terms depend on the issuer and your account history.

Request the terms in writing before you agree to anything. Verbal agreements are difficult to enforce if the issuer later claims you never made one. The written agreement should state the new payment amount, the duration of the program, what happens when it ends, and whether interest continues to accrue.

Key Takeaways

  • Contact your card issuer before your payment is due to discuss hardship programs that may lower your payment or pause interest.
  • A missed payment stays on your credit report for seven years and triggers late fees, penalty interest rates, and potential legal action.
  • If you cannot afford the minimum payment, you may be able to negotiate a lower amount or a debt management plan through a nonprofit credit counselor.
  • Closing the card after you catch up on payments stops new charges but does not erase the debt or improve your credit faster.
  • If the issuer sues and wins, they can garnish wages or freeze bank accounts depending on your state's laws.

Understand What Happens When You Miss a Payment

A payment is considered late if it arrives after 11:59 p.m. on the due date shown on your statement. The issuer will report the late payment to the three major credit bureaus — Equifax, Experian, and TransUnion — once it is 30 days past due. That late payment will remain on your credit report for seven years from the date it first became 30 days late.

The issuer will also charge you a late fee, which varies by card but typically ranges from $25 to $40 for the first late payment. If you miss another payment within six months, the fee may increase. At the same time, the issuer will apply a penalty interest rate — often 25% to 29.99% APR — to your balance. This rate applies to new purchases and sometimes to your existing balance, depending on the card's terms.

After 60 days past due, the issuer may freeze your account, preventing you from making new charges. After 180 days past due, the issuer typically closes the account and may sell the debt to a collection agency. At that point, a debt collector can contact you by phone, mail, or email to demand payment. If the debt collector sues and wins a judgment, they can garnish your wages or freeze your bank account — the rules vary by state.

Negotiate a Payment Plan or Reduced Amount

If the issuer's hardship program does not fit your situation, ask whether you can negotiate a lower payment amount or a payment plan. Some issuers will accept a smaller monthly payment than the minimum if you commit to paying off the balance within a set timeframe. This is not a formal program; it is a one-time agreement between you and the issuer.

Be specific about what you can afford. If you can pay $100 per month instead of the $250 minimum, say so. The issuer would rather receive $100 monthly than nothing at all. Get the agreement in writing, including the new payment amount, the number of months you have to pay, and whether interest continues to accrue at the standard rate or a reduced rate.

If you cannot negotiate directly with the issuer, consider working with a nonprofit credit counselor. Organizations like the National Foundation for Credit Counseling (NFCC) and the Financial Counseling Association (FCA) offer free or low-cost counseling. A counselor can contact your issuer on your behalf and may be able to negotiate a debt management plan — a formal arrangement where you pay a single monthly amount to the counselor, who distributes it to your creditors. The issuer may lower your interest rate in exchange for enrolling in the plan.

Know the Difference Between Hardship Programs and Debt Settlement

A hardship program is an arrangement with your card issuer to modify your existing debt. You still owe the full balance, but the issuer changes the terms — lower payment, lower interest rate, or paused interest — to help you catch up. Once the program ends, you resume regular payments on the remaining balance. Your account stays open, and the issuer reports the account as current once you make the agreed payments on time.

Debt settlement is different. You negotiate with the issuer (or a debt collector) to pay a lump sum that is less than what you owe — for example, paying $5,000 to settle a $10,000 balance. Once you pay the settlement amount, the debt is closed. However, the issuer will report the account as "settled" or "paid in full for less than the full balance," which damages your credit score. Debt settlement also has tax consequences: the forgiven amount may be treated as taxable income by the IRS.

Do not hire a debt settlement company to negotiate on your behalf. These companies charge high fees (often 15% to 25% of the amount settled) and may advise you to stop paying your card, which accelerates late fees and damage to your credit. You can negotiate a settlement yourself by calling the issuer or a debt collector directly.

Explore Bankruptcy as a Last Resort

Bankruptcy is a legal process that either eliminates unsecured debts like credit cards or creates a court-approved repayment plan. There are two types available to individuals: Chapter 7 and Chapter 13.

Chapter 7 bankruptcy liquidates your non-exempt assets and uses the proceeds to pay creditors. Credit card debt is typically discharged — erased — at the end of the process, which takes three to six months. However, you must pass a means test, which compares your income to the median income in your state. If your income is above the median, you may not be allowed to file Chapter 7. Chapter 7 also stays on your credit report for ten years.

Chapter 13 bankruptcy creates a three- to five-year repayment plan approved by the court. You pay a portion of your debts through the plan, and the remainder is discharged. Chapter 13 does not require a means test, but it requires a regular income. Chapter 13 stays on your credit report for seven years.

Bankruptcy is expensive: filing fees range from $300 to $400, and attorney fees typically run $1,500 to $3,500 or more. However, filing triggers an automatic stay, which immediately stops collection calls, lawsuits, and wage garnishment. If you are being sued or your wages are being garnished, bankruptcy may be worth the cost. Consult a bankruptcy attorney in your state to understand whether it makes sense for your situation.

Avoid Predatory Lending and Payday Loans

When you cannot pay a credit card, you may be tempted to take out a payday loan or a cash advance to cover the payment. Do not. Payday loans typically charge 400% APR or higher and are designed to trap you in a cycle of debt. If you borrow $500 for two weeks, you might owe $575 when the loan is due — and if you cannot pay, you roll it over and owe another fee.

Similarly, taking a cash advance on another credit card does not solve the problem; it moves the debt to a different card and often charges a higher interest rate and an upfront fee. The same applies to personal loans from online lenders that advertise "bad credit OK" — they charge high rates and fees that make your situation worse.

If you need immediate cash for a genuine emergency, explore these options first: asking family or friends for a loan, negotiating a payment plan with the creditor you owe (as described above), or contacting a nonprofit credit counselor who can help you prioritize which bills to pay first.

Rebuild Your Credit After You Catch Up

Once you have made a payment plan with your issuer or paid off the card, your credit will not improve immediately. Late payments stay on your report for seven years, but their impact decreases over time. A late payment from two years ago affects your score less than a late payment from two months ago.

To rebuild your credit while the late payment is still on your report, keep your remaining credit card balances low — ideally below 30% of your credit limit — and make all payments on time. If you have other debts like a car loan or mortgage, continue making those payments on time as well. Payment history is the largest factor in your credit score, so consistent on-time payments will gradually offset the damage from the missed payment.

Do not close the card after you catch up, even if you are tempted to avoid future debt. Closing the card reduces your total available credit, which raises your credit utilization ratio and can lower your score. Instead, keep the card open, use it occasionally, and pay the balance in full each month.

Frequently Asked Questions

Can the credit card company sue me if I don't pay?

Yes. If your account is 180 days or more past due, the issuer or a debt collector can file a lawsuit against you in civil court. If they win a judgment, they can garnish your wages or freeze your bank account, depending on your state's laws. Some states limit how much can be garnished; others allow the creditor to take a percentage of your paycheck until the debt is paid.

What is the difference between a hardship program and a payment plan?

A hardship program is a formal program offered by the card issuer with set terms — for example, a 12-month program with a reduced interest rate. A payment plan is a one-time negotiation where you and the issuer agree on a lower monthly payment. Hardship programs are more structured; payment plans are more flexible but less formal.

Will my credit score recover if I pay off the card?

Your score will improve once you catch up and stop missing payments, but the late payment itself will remain on your report for seven years. The impact decreases over time — a late payment from five years ago affects your score much less than one from six months ago. Consistent on-time payments and low credit card balances will help your score recover faster.

Should I use a debt settlement company to negotiate with my card issuer?

No. Debt settlement companies charge high fees and often advise you to stop paying, which worsens your credit and increases late fees. You can negotiate a settlement yourself by calling the issuer or debt collector directly. A nonprofit credit counselor can also negotiate on your behalf at little or no cost.

What happens to my credit card debt if I file for bankruptcy?

In Chapter 7 bankruptcy, unsecured debts like credit cards are typically discharged — erased — after three to six months. In Chapter 13, you repay a portion of the debt through a court-approved plan over three to five years, and the remainder is discharged. Both types stay on your credit report for seven to ten years, but your score can begin recovering within two to three years if you rebuild responsibly.