Credit card delinquencies are on the rise, and that likely won’t be changing soon. Younger credit card users are struggling the most, with 15.3% of Gen Z and 12.1% of Millennials carrying maxed-out cards, according to 2024 data from the New York Federal Reserve.

If you can't keep up with your credit card debt, it may feel like you have no recourse when you miss payments. However, there are options to improve your situation.

Do these 4 things if you can’t pay your credit card bill

1. Contact your credit card company

Don’t wait to contact your credit card company if you’re missing payments. While it might seem unlikely, your credit card issuer may be willing to work with you on a payment plan or reduce your late fees or interest rate temporarily to help you get current on payments.

Taking this step could help you avoid dealing with a collections agency in the future. If your account is sent to collections, it could result in further damage to your credit.

Read more: What happens if you stop paying your credit cards?

2. Make a plan to catch up on your payments

Creating a plan to catch up on payments is your next step. While this won’t necessarily be easy, it’ll likely be worth it if it means you’re able to repay your credit card debt. Consider using a free budgeting app to help you better understand your monthly spending. These apps often categorize your spending automatically, which will provide valuable insight as you work on a plan.

Once you understand where your money is going, it’s time to make some adjustments. Are there areas where you could spend less? If so, consider cutting out those things temporarily and putting that money toward your credit card payments.

Read more: How to save money in 2024

If you can’t cut any discretionary spending, consider if you can increase your income. Fortunately, there’s no shortage of side gigs available, so you can find an option that fits your interests and schedule. Flexible jobs include:

• Walking dogs with a service like Rover

• Delivering food or groceries for Instacart or Doordash

• Driving for a rideshare service like Lyft or Uber

• Babysitting or nannying through a service like SitterCity

3. Consider debt consolidation or credit counseling

If your credit is decent, you might consider consolidating your credit card debt with a lower-interest personal loan or a 0% introductory APR credit card. Doing so could help make your debt more manageable, as your interest costs will be lower.

Working with a credit counselor is another option if you’re struggling with significant debt. Credit counselors evaluate what you owe and help you create a plan to repay it. You might pay a fee for a service like this, but some credit counselors may not charge fees at all. Resources like the Financial Counseling Association of America (FCAA) and the National Foundation for Credit Counseling (NFCC) can help you find a reputable credit counselor locally.

Read more:
How to consolidate credit card debt with a personal loan
What is a balance transfer?

4. Check your credit

Once you’ve devised a plan to keep current on payments, you should check your credit score and reports. This step might be scary, especially if you’re significantly behind on your credit card payments, but it will give you an important starting point. Understanding your credit, no matter how poor it might be right now, will help you track your progress over the longer term.

You can get free copies of your credit reports at AnnualCreditReport.com, and many credit card issuers offer free credit score access via your online account.

What to avoid if you can’t afford your credit card payment

The steps above will help you formulate a plan to regain your financial footing. That said, hefty credit card debt and missed payments can feel overwhelming, so it’s important to avoid certain pitfalls so you don’t end up struggling even more.

First, steer clear of payday loans or title loans. Even if you’re missing credit card payments, these predatory loans aren’t a good option for paying off your credit card debt. Loans like these come with exorbitantly high rates and fees, making them especially difficult to repay. If you borrow from a payday or title lender, you could end up even deeper in debt.

It’s important to take action on your debt as soon as you realize it’s unaffordable. While ignoring it can feel easier than facing it head-on, it won’t make your debt go away. Instead, it could result in even more damage to your credit and longer-term consequences. Start formulating a plan to deal with your debt sooner rather than later.

How to rebuild your credit

After you’ve worked out a plan and started making payments again, focus on rebuilding your credit in the longer term. Improving your credit can give you access to more opportunities, including better rates on future loans, lower insurance premiums, and more options for apartments if you’re renting. Here are some steps that could help boost your credit over time.

1. Make on-time payments

Your payment history significantly influences your credit scores, so making on-time payments should be your first priority once you've regained your financial footing. Consider setting up automatic credit card payments to help you stay current. Consistent, on-time payments will help improve your credit.

2. Keep your credit utilization low

The amount of your total available credit you’re using, or your credit utilization, also impacts your credit scores in a big way. In general, the less credit you're using, the better. As you pay down your debt, work toward keeping your credit utilization low to help your credit.

3. Avoid opening several new accounts

Opening new accounts can impact the age of your credit history and will result in individual hard credit inquiries, which can harm your score by a few points. If possible, avoid opening several new credit accounts and stay focused on repaying your current balances. Doing so will help you prevent further damage to your credit scores.

You’re not alone if you’re feeling overwhelmed by credit card debt. While that feeling of overwhelm is normal, it’s crucial to avoid getting bogged down by it. Instead, take positive steps to help improve your situation.

This article was edited by Alicia Hahn

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