Many unexpected situations in life can leave consumers in a tight spot financially. Job loss, illness and other events can make it difficult to make even minimum credit card payments. When credit cards become delinquent, negative marks are added to the consumer's credit report. As time goes by, the account may classified as charged-off, all the while accumulating interest, late fees and possibly over limit fees. The charge-off designation means that the account has been written off because it has become seriously delinquent. A charged-off account has a very negative impact on your credit report and lands your account in the hands of a collection department. You can take action to prevent all of this from happening if you're willing to confront the situation.
Step 1
Contact the creditor who owns your credit card by telephone. Depending on how past due the account is, you may be transferred to their internal collections department. It is best to take care of accounts that are still with the original creditor, even if they've gone to collections. Once they are categorized as charged-off and sold, they become much more difficult to deal with.
Step 2
Explain your situation to the customer service or collections representative. Be honest with them about why your account has fallen into a delinquent status. Let them know what your budget currently is and why it's difficult or impossible to make your payments.
Step 3
Ask the representative if the credit card company has any sort of program that would help you. Some companies have programs in place which would lower the interest rate and your payments. If not, ask to set up a payment plan that will work with your budget. If you are only able to make very small payments at the present time, but anticipate more income in the near future, offer to call them back in a few months to reevaluate the plan. Don't be afraid to ask that late fees and interest be removed from your account. If the representative is unwilling to work with you in any way, ask to speak to the manager.
Step 4
Ask for a settlement on the account if you have the means to make a settlement payment. Credit card companies are sometimes willing to settle on delinquent accounts to avoid charging them off. Be sure to get the settlement agreement in writing prior to making the payment.
Step 5
Make your payments on time each month, whether you agree on a payment plan or a settlement. Missing any of these payments could void your whole agreement. Keep receipts of your payments which can be in the form of online confirmations or copies of your checks.
Things You'll Need
- Account statements
- Telephone
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