Debt and Money Written on Thursday, 26 October, 2023

Steps to Take When Struggling to Pay Your Credit Card

Struggling to pay off your credit card can be a stressful situation, and at times, it may seem hopeless. However, we have compiled a few steps to help you regain control of your finances.

Create a budget

Creating a budget is key to track exactly where money is coming from and where it is going. Taking a closer look at your expenses can give you a clear idea of areas where you can cut back to help tackle more important payments.

If you need extra help in creating a budget we have a great guide on how to create a budget and stick to it.

Prioritise credit card payments over non-essentials

You will need to prioritise your credit card payments over other non essential expenses that you have found in your budget that you can cut back on. For example substituting home cooked meals over take-out can significantly reduce your monthly expenses.

Explore refinancing options

One way to potentially save some money is to explore different refinancing options for your mortgage or car loan. By refinancing, you may be able to secure a lower interest rate or extend the loan term, which can help reduce your monthly payments and free up some extra cash. It’s important to carefully consider all the available options and consult with a financial advisor to ensure that refinancing is the right choice for your specific situation.

Generate extra cash

Sell unused or unwanted items

One way to generate extra cash is by selling any unused or unwanted items that you may have. By doing so, not only can you declutter your space, but you can also earn some additional money.

Consider going through your belongings and identifying items that you no longer need or use. These could include clothes, electronics, furniture, or even books. Once you have identified these items, you can list them for sale on online platforms or organise a yard sale. This way, you can turn your unused possessions into extra funds that can be used to help pay off your credit card.

Seek part-time employment or freelance work

Another way to help increase your income could be to search for part-time employment opportunities or take on freelance projects. By diversifying your sources of income, you can not only help pay off your balance quicker but also open up new opportunities for personal and professional growth.

Consider transferring the balance

If you are able to, it may be worth considering transferring the balance to a credit card with a lower interest rate. If you are able to apply for a lower interest rate card, you could save on the additional interest being added to the total balance each month.

Applying for a balance transfer cards is dependent on your credit score but there are options available for those with poor credit scores. It is always advised to do prior research before going through a ‘hard search’ which may negatively impact your score.

However, keep in mind that you should only use the new low-interest rate card to pay off the balance of your other card. If you use the new card similar to the older one you run the risk of repeating the cycle again.

Ask others for help

There is no shame in asking others for financial help, especially if you are struggling. There are many organisations that could give you expert financial advice, catered specifically for your situation.

Contact the credit card company

To alleviate the financial strain caused by high interest rates, consider negotiating with your credit card company for a lower interest rate or a temporary payment plan. Start by contacting the credit card company and initiating a negotiation process.

During this process, discuss the potential of obtaining a lower interest rate on your credit card balance or explore the option of setting up a temporary payment plan with more favourable terms. Engaging in this negotiation can potentially reduce the burden of high interest rates and establish a repayment structure that is more manageable for you.

Remember, it is essential to clearly communicate your financial situation and demonstrate your commitment to fulfilling your payment obligations while seeking a mutually beneficial agreement with the credit card company.

Consult credit counsellors for financial advice

It is highly recommended to seek professional financial advice from a reputable credit counselling agency. By doing so, you can thoroughly explore various debt management options that may be available to you. This will provide you with a comprehensive understanding of the strategies and solutions that can help you effectively manage your debts and improve your financial situation.

Contact your local organisations

There might be local organisations in your area that offer financial assistance. You could also reach out to community centres or non-profit organisations that specialise in providing support to individuals in need. These organisations often have resources and programs in place to help individuals access grants and other forms of financial aid.

Another option is to visit your local council building, as they might have information on various grants and assistance programs specifically tailored to individuals facing financial hardships. By exploring these avenues, you can increase your chances of finding the financial support you require.

Help is there for you

Struggling to pay off your credit card can be overwhelming, but there are steps you can take to regain control of your finances.

Start by creating a budget to track your expenses and prioritize credit card payments over non-essentials. Explore refinancing options for your mortgage or car loan to potentially lower monthly payments. Generate extra cash by selling unused items or seeking part-time employment.

Consider transferring the balance to a card with a lower interest rate, but use it responsibly. Ask for help from financial organizations, negotiate with your credit card company, consult credit counsellors, and explore local assistance programs.

Remember, there are resources available to help you through this challenging situation.