How to Avoid Credit Card Default and Debt Collection

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Let’s face it, credit card debt does not discriminate. Many have suddenly come to the realization that they can no longer afford their monthly credit card payments. Fortunately, there’s an effective solution that can help you avoid default or collection on your credit cards, while at the same time keeping a little more cash in your pocket.

All legitimate credit card companies have special “short-term payment plans” for those having trouble making their monthly payments. You can initiate these payment plans yourself, and they’ll allow you to make payments (with interest greatly reduced or eliminated) for a period of 3 to 6 months. The length and terms of these plans will vary among companies.

If you’re in default, or been faced with late payments and penalties for several months, these payment plans will forgive all penalties during the course of the plan and will restore your account from default when your payment plan has ended. — Paying less per month AND restoring your account from default, not a bad deal!

So, why are credit card companies so willing to do this? Because  the last thing they want to do is to send your account to collection. They will if necessary, but the collection agencies will take a significant amount of the money collected. If legal action is required then even more money is lost to legal fees. This is why they’re willing to go the extra step to avoid closing your account. They will make more money in the long-run by keeping you as a customer. To YOUR advantage, you can save a lot of money over the next few months, avoid default or collection and finally get yourself back on track.

Ok. Whether you’re just concerned about making your next few payments, or your account is already in default — Here’s how to go about it…

1. Simply call your credit card company and say to the representative something to this effect — “I’m calling because I’m having some financial problems right now, and I’m concerned that I won’t be able to make my minimum payments for the next few months. Is there anything that can be worked out until I get caught up?” — You’ll probably be quite surprised how receptive they actually are to you. Remember, they don’t want to close your account. They will work with you.

2. If your account is already in default (late or missed payments ), say something like this — “I realize my account is currently in default. Is there anything that can possibly be worked out to help me get caught up?”

3. Now, one of two things will happen. They will either ask up-front how much you can afford each month, or they will simply present a possible “short-term payment plan” to you.

4. If they initially ask up-front how much you can afford, be realistic (If you’re payments are $250 a month, don’t say you can only afford $5 a month). At this point, your conversation will lead into an actual payment plan.

5. If they initially present a “payment plan”, they usually will never lay out their best deal for you right away. It’ll be better than what you’re paying now, but they can usually do better. Simply ask — “That’s a little more than I think I can handle. Is it possible to extend the payments any more to help bring them down?” — You’ll get a ‘yes’ or a ‘no’, but at least you asked. More often than not, they will extend the payments for you.

6. Some of us have simply been careless with our credit cards, while others have had little choice but to live off their credit in these tough times. Whatever the case, being in debt and harassed by creditors is the worst feeling in the world. A simple phone call to your credit card company can help you avoid financial disaster and get you back on track.


This may be an ideal time to talk to your credit card companies. They’re seeing accounts default in record numbers right now. Creditors are much more receptive to individuals who take the initiative themselves to avoid default or collection.

It’s not out of the question that some credit card companies may not be so willing to help. In such cases, CareOne Credit Counseling & Debt Relief is a very reputable company that can help with almost any credit or debt related problem you may have.


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