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What happens if I can't pay my credit card?

If you can’t afford to pay your credit card statement, there are things you can do that could help.

23 February 2023Helen Tippell 3 min read
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Image by Kelly Sikkema on Unsplash

Do you know what your credit score is?

Keep an eye on your credit score.

Check your score

If you need debt advice, you can speak to charities like StepChange, National Debtline and Citizens Advice.

Generally, it takes about 30 days for a missed payment to show on your credit report. If you manage to make the full payment quickly (and before that 30-day period ends) your lender might not report it to the credit reference agency (like Equifax).

But if you miss the payment for that period – or are only able to pay some of the outstanding balance – it’s likely that it’ll show as a late or missed payment on your report.

If you can’t pay back the money you owe on a credit card and you either miss the payment or pay it back later than the due date, you could see a drop in your credit score.

Late and missed payments, once reported, can stay on your credit report for six years. But, if you think there’s been an error, you can raise a dispute with the credit reference agency (like Equifax).

Remember: this isn’t financial advice, but general information designed to give you an idea of the options out there. You should always think about your own circumstances and make the best decision for you.

If you know you won’t be able to afford to pay your credit card this month, you can take steps to help yourself.

Talk to the lender

Let your lender know that you’re struggling to pay. Contacting their customer service team should give you the opportunity to agree the steps you’ll take to make up the payment. You can usually find their contact information by scrolling to the bottom of their website and clicking on something like ‘Contact us’.

Work out what you owe and when

Break down your other monthly expenses and what you owe on your credit card. Getting a clear picture can help you tackle the problem head-on.

Make a repayment plan

If you’ve reached out to your lender, they might have arranged a repayment plan with you. But it’s a good idea to see how that plan works alongside your other expenses to make sure you’re comfortable. Even if you just write down what money is leaving your account/being transferred to your credit card on which days – clearing the fog can help you feel more confident about handling the payments.

See if you can switch to a cheaper credit card

You could compare different credit cards to see if there’s one that offers lower rates – like a 0% balance transfer card. A balance transfer card lets you move the debt you owe onto that new card and, if you can make repayments within the 0% (or low) interest rate period, you could save money overall.

Consolidate your debts

Consolidating your credit card debt means taking out a personal or debt consolidation loan to pay off what you owe – usually across multiple cards. You’d use the loan to repay the credit card (or cards) and you’d be left with one, more manageable payment. If you choose to do this, make sure you understand the fees or rates associated with the new loan.

If the last two options – a balance transfer card or a debt consolidation loan – aren’t available to you, reaching out to a charity for advice can help. They can support you in understanding your options and give you advice on what your next steps should be.

To negotiate your credit card debt, you usually have to show your lender proof that you can’t afford to pay – like a budget that shows your essential outgoings (mortgage, bills, food, for example). If they agree to reduced monthly payments, it will show on your credit report (in a similar way to a late or missed payment) and can impact your credit score. This could make it more difficult for you to get new credit cards or loans in the future – but if it’s the right option for you, charities like StepChange have helpful information on how to make a budget and negotiate debt.

If you’re worried about repaying your credit card, you can seek advice from various charities dedicated to supporting people experiencing financial difficulties.  You can go to charities like National Debtline and StepChange and ask one of their experts for guidance. You can also reach out to Citizens Advice.

If the credit card company has sent you a letter, it will usually tell you what steps they’ll take to recover the money. It’s a good idea to contact them to discuss your options but you can also speak to companies like National Debtline and StepChange to ask for advice.

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Written by Helen Tippell

Digital Copywriter

Helen's our resident Digital Copywriter. She makes personal finance easier to understand so you can be confident about your credit choices.