Having a credit card and using it correctly can be very useful. Sometimes, however, events happen that make it difficult to pay back the amount owed to the credit card company. Even making the minimum monthly payment may become unrealistic. Here are a few different ways a minimum monthly payment can be lowered.
Step 1
Reduce your interest rate on your account, if possible. The interest rate is used in calculating the minimum monthly payment and, if lowered, can lower the monthly payment as well. Talk to a customer service representative to see if lowering your interest rate is an option. If you have a good payment history, this will increase your chances of a reduction. As a bonus, a lower interest rate will also lower the overall amount that you will be charged throughout the life of the account.
Step 2
Pay down your balance. While this may not be an option for those struggling to pay even the minimum payment, this doesn't change the fact that paying down the balance on the account will serve to decrease the monthly payment as well.
Step 3
Talk to a customer service representative about lowering your monthly payment amount. In times of hardship, it is not uncommon for credit card companies to be able to offer a lower payment to those that are in need. There are also hardship programs available that you may qualify for, helping to lower the amount that you owe. Be aware that your creditor may view you as more of a risk if you admit to being in financial strain and may actually increase your interest rate as a result.
Step 4
Transfer your balance to an account that has a lower interest rate since a lower interest rate equals lower monthly payments. Note that having too many credit cards or closing long-standing accounts may have a negative impact on your credit score so weigh your options carefully to keep your credit score as high as possible.
Step 5
Enroll in a debt management program. Debt management plans will charge you one monthly payment, which they will then disburse accordingly, so that you don't have multiple payments to multiple creditors. Debt management companies can often negotiate deals with creditors, which can help to lower your interest rate and decrease the amount that you pay monthly.
Step 6
Consider a debt consolidation loan or a home equity loan if you have good credit, steady income and a lot of equity in your home (or similar asset). The money loaned goes toward paying off the card and monthly payments are then made to the lender, often at a lower monthly payment than you were previously paying.
Tips and Warnings
- Talk to a credit counselor or a financial advisor to determine the best option for your personal financial situation.
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