Dawn Cattrell, a debt advisor at the StepChange, explains what you can do if you are struggling financially, or are simply in need of additional support in paying credit card bills.

Managing debts

Navigating a post-pandemic world has proved to be difficult for many of us. Someone who previously managed their credit bills with ease and had additional money in their budget at the end of each month may now find themselves in debt and struggling to manage day-to-day.

Mortgages, rent and household bills have increased to the point where some clients have needed to rely on credit cards to help with priority bills, general household costs, or simply to help them get by each month. There’s a persistent squeeze on personal budgets that continues to spread across the nation.

No matter your situation, it’s important to remember that there are a multitude of options and tools available depending on how quickly you access help and support.

How can you manage credit card arrears?

Credit cards are covered by the Consumer Credit Act 1974 (CCA). This means there are strict rules your creditors must follow if you’re struggling to pay your credit card bills. In short, the sooner you act, the more likely you are to manage credit card debt and arrears with fewer complications or penalties.

Naturally, some feel optimistic about household costs dropping just as quickly as they appeared to rise during the cost-of-living crisis, therefore relying on credit because it feels easier and helps move things along in the interim.

Be aware of minimum payments

It’s important to remember, however, that all credit cards have a minimum amount you must pay back each month. If you’re only able to meet the minimum payment each month then you’ll also continue to pay interest, which means it’ll take a longer time for you to clear the credit card debt entirely.

If you’re unable to make the minimum payments, then your account will go into arrears and your lender will contact you to insist the missing payments are made. If you don’t make the payments they ask for, then the account will default. Unfortunately, further action may be taken if they fail to receive payment following this, such as employing debt collection agents to recover the money they’re owed.

Early communication

If you’re falling behind with payments, it’s often a good idea to contact your credit card provider to explain what’s happening and tell them how much you can afford to pay each month. Many creditors will agree to an affordable repayment plan or a payment holiday to help you get back on track, even if this is only for a few months.

By understanding your budget better, you may find that you’re able to pay off your credit card faster and at a rate you can afford.

Contact StepChange

StepChange is available to help whatever stage you might be in your financial journey, whether you need help adjusting your budget, you’re finding it difficult to make monthly minimum payments, or you’ve recently had a county court judgment (CCJ) implemented.

By understanding your financial situation, StepChange can explain the options available to you and how best to navigate any outstanding debts, giving you the ability to live your life knowing your debts are being taken care of and you’re back on track.

About the author

Dawn Cattrell is a debt advisor at StepChange, a charity dedicated to making debt support available for anyone who needs it.

See also

Getting help when you can't pay your gas and electric bills

What types of debt can be included in a DRO, an IVA and bankruptcy?

Find out more

Consumer Credit Act 1974 (Legislation)

Images

Getty Images

Publication date

13 August 2024

Any opinion expressed in this article is that of the author and the author alone, and does not necessarily represent that of The Gazette.