Tag Archive for: credit card delinquency

Credit Card Delinquencies Are Rising. Here’s What to Do If You’re at Risk

Seriously overdue credit card debt has reached its highest levels in over a decade, and Americans ages 35 and under are having a tougher time than other age groups when it comes to paying regular bills. According to APNews, the portion of credit card debt that is severely delinquent, which is debt more than 90 days overdue, jumped to 10.7% in the first quarter of 2024, up from 8.2% a year ago. 

Several factors could be contributing to this alarming trend. One is that credit card interest rates remain incredibly high. Also, persistent inflation continues to put a strain on many household budgets. If you are experiencing credit delinquencies or are concerned you may be at risk, there are several things you can do to protect your financial well-being and future. 

Investigate Credit Card Forgiveness Programs

One of the first things you should do is investigate whether there are any credit card forgiveness programs that you might qualify for. These are often something a debt relief company will advertise. However, it seems rare that any credit card company would voluntarily wipe out a person’s debt without some consideration. If you do get any amount forgiven, it’s important to note that you may owe takes on that amount. 

Attempt to Settle Your Debt on Your Own

If you’re comfortable speaking with creditors and negotiating with debt collectors, you may be able to make a dent in your credit card delinquency problem on your own. Credit card companies know that they are better off negotiating debt than getting nothing at all. This puts you in a position of strength. 

You’ll want to do some extensive research about how to effectively handle these negotiations, but it can be done. For example, you should be prepared to explain your existing hardship and offer the company a realistic settlement to get rid of the debt. 

Enroll in a Debt Management Program

A debt management program is usually administered by a credit counseling agency. To enroll in one of these programs, you contact a reputable credit counseling agency that can help you consolidate your debt and make a single monthly payment, usually with a reduced interest rate that they will negotiate on your behalf. 

The obvious benefit of this option is that you can pay off your existing debt with a lower monthly payment, and usually faster than if you continued to pay the cards individually. However, if you can’t control your spending, you could end up in the same situation you were in before. 

Use a Credit Card Hardship Program

Some credit card companies have started offering hardship programs that are meant to help customers who are undergoing financial difficulties. These programs might include:

  • Lower minimum payments
  • Waived fees
  • Temporary interest rate reductions
  • Short-term payment deferrals

To get access to credit card hardship benefits, you should contact your card issuer’s customer service number and ask if they have this program available. These programs are designed to assist people facing temporary financial issues, though, so you can expect that the credit card company will ask for documentation of your current hardship. 

Consider a Debt Consolidation Loan

If you are struggling with credit card debt from many different lenders, it’s possible that a debt consolidation loan could offer some relief. This is particularly the case if you are only making minimum monthly payments on cards with high interest rates. 

A debt consolidation loan should have a lower interest rate than what you’re paying currently. For example, some people take out personal loans to consolidate debt or work with lenders who offer loans specifically for this purpose. However, if you’re seriously delinquent with your credit card payments, you may find it difficult to get approved for one of these loans. 

Wipe Out Debt Using Personal Bankruptcy

Another option you can consider if you’re truly struggling with overwhelming debt is personal bankruptcy. This can provide you with a fresh financial start and get the creditors off your back immediately. 

When you file for bankruptcy, you get an automatic stay, which prohibits creditors and debt collectors from harassing you about payments. Depending on which type of bankruptcy you choose, Chapter 7 or 11, your unsecured debt can either be wiped out or restructured to make your payments more affordable. 

Bottom line: If you are struggling with credit card delinquencies, you have several options. One of those is personal bankruptcy, which is not something you want to approach on your own. Gulf Coast Bankruptcy is dedicated to providing useful information to people struggling with their finances so they can make the most informed choices about their financial future.