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what happens if i can’t pay my credit cards?
what happens if i can’t pay my credit cards?

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What Happens If I Can’t Pay My Credit Cards?

Credit card debt can be difficult to manage, especially if you can't manage the monthly payments. But there are things you can do to reduce your debt and even clear the debt from your name.
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Credit card companies have to follow strict rules as credit cards are covered by the Consumer Credit Act (CCA). When used wisely, credit cards can be very helpful. But if you are not careful, they can become a very expensive way of borrowing money, especially if you make large purchases that you can't pay every month.

Let's look at a few things you can do if you can't pay your credit card bills.

Help with credit card debt

If you struggle to make your credit card payments every month, or you are consistently making late payments, a creditor may be able to help by offering you a payment holiday. 

However, keep in mind that a payment holiday will negatively impact your credit score as it will show up on your profile. Depending on the lender, charges typically continue during the payment holiday, so your minimum payment may go up after your payment holiday ends. It might even make it harder to get credit in the future, so make sure that a payment holiday is the right option for you. 

It’s worth noting that payment holidays during Covid-19 that were offered between March 2020 and July 2021 won’t affect your credit score as it won’t appear on your credit profile 

You can also increase the credit limit on your card, but make sure that you consider the impact it may have on the longer term. If you are on a debt solution, increasing your credit limit may be against the terms of the agreement, so always speak to your debt solution provider before taking this as an option. 

How can I pay off my credit card as quickly as possible?

There are a few ways you can pay off your credit card debt as quick as possible. There’s the option of taking out a personal loan or, as we’ve listed below, a number of ways to save money and settle your debts quickly.

1. First, understand your finances, so you can figure out what you can afford to spend each month. Make a list of your income and expenses without using any further credit. Then turn this into a monthly plan that you can follow.

2. You should use this budget to pay off your credit card debt, or ideally to save money for an emergency fund. Transferring this amount to a separate account can be helpful.

3. Don't use your credit card, even for a short period of time. If the amount you owe keeps increasing, it’s much harder for you to pay it off.

4. Make sure you’re on top of your ‘priority bills’. These include council tax, any fines, and any court costs. If you fall behind on payments, you may be visited by enforcement agents.

5. If you're not sure what to do, get free debt help. A debt solution provider can give you independent debt advice about different solutions for your needs (including credit counselling), and set up a repayment schedule.

Can you go to jail if you can't pay your credit card debt?

While this is something most people worry about, the chances of going to jail for not paying back your debts are very rare. Only certain types of debt, such as criminal fines and government debts are considered to be a last resort after other methods of debt collection have been exhausted.

Most forms of credit can't be enforced by the threat of imprisonment. If a creditor threatens you, you should consider making an official complaint against them.

Can you negotiate a better rate for credit card balances?

If you’ve fallen behind with payments, it may be a good idea to contact the credit card company to explain what’ s going on and tell them how much money you can afford to pay per month.

If you're having trouble paying off your debts, many creditors will be willing to negotiate an affordable repayment plan or offer a payment holiday to help get you back on track.

If you have the funds available, some creditors will accept a “full and final settlement” to pay off debts that are typically smaller than the total amount owed.

How does credit card debt affect my credit score?

Credit card providers may share information with the main credit reference agencies about how you use your card to keep your credit score up to date. Other lenders can use this information to decide how risky it is to lend money to you.

Credit files state the balance owed, your payment history and if the account has defaulted. Credit card providers give extra information to the credit file companies, including:

  • Your credit limit

  • Your often you use your card for purchases every month

  • How much cash you withdraw from your card every month

What if you have joint debt on a credit card?

The law only allows one person to hold an active credit card account, so there's no way for two people to share a single credit card. Your credit card provider may allow you to have a second credit card so that your partner or another person can use it.

Keep in mind that if you get a second card from your card provider you'll remain liable for all the spending on both cards. The second card holder is not responsible for the debt, even if the card has their name on. 

For this reason, think very carefully before asking for a second card that may negatively impact your credit history. 

Minimum credit card payments

All credit cards come with a minimum payment you have to make every month. 

This amount is typically a percentage of the total amount you owe on the card, which can be 1% to 3%. Normally, there'll be a minimum amount of £5 payable on most credit cards.

Should your payments cover more charges and interest than the amount of your actual card balance for a period of 18 months or more, it can be classed as persistent debt. 

When you have persistent debt like this, your credit card issuer may ask you to increase your monthly payments. Some credit card companies may also change their terms to increase the minimum payment to help you get out of persistent debt.

if you understand your budget you might find that it's easier to pay your credit card at a reasonable rate that you can comfortably afford.  

Tips if you struggle to pay off your credit card debt

If you're continually struggling to make your credit card payments on time, here are a few tips that can help you pay off your credit card debt.

Calculate what you owe

The first stage is to calculate exactly what you owe including the interest. Write down the amounts owed on each credit account you've got, alongside the interest rate, the minimum monthly payment, and the total cost. If you are unsure what you're paying, it's a good idea to find out about credit card charges.

Now you'll be able to work out how much you need to meet all your payment obligations.

Cut non-essential spending to make sure you can meet this and try to increase payments when possible so you can pay off what you owe sooner.

Prioritise high-interest debt

Once you've figured your monthly minimum payment total, see if you can increase that, even by just a little. If you're paying £100 a month on your credit card and can afford an extra £10, put that towards the highest interest account. Doing so will save the most money in the end.

It's also important to prioritise any other debts you may have. These include council tax, rent or any unpaid income tax, and generally considered a higher priority than the others because of the consequences of failing to pay - not to mention the negative impact on your credit rating. 

Look into alternative lending

If your credit card bills are costing you too much money, it may be cheaper to transfer the debts to another card, like a balance transfer credit card. You could look to move the credit to an account that has a lower interest rate to lessen your credit card repayments.

Some credit card companies may offer low or no interest rates on balance transfers for an initial interest-free period but there may be fees associated with the initial transfer.


Missing your credit card payment can lead to a string of consequences that could cost you thousands of dollars. However, you don't need to fully pay off your debt to prevent this from happening.

Making minimum payments on time will keep your balance current and avoid a late payment fee, penalty APR (annual percentage rate), or a negative impact on your credit report. You can set up automatic payments if you know you'll have the funds to pay the full amount at once.

Tracking your income and expenses with a budget tool could also give you an idea of whether you're spending too much money on things you'll be unable to pay off later.

However, if your struggles don't come from overspending, your best options may be to talk to your creditors to arrange payment plans, or getting help from a credit counsellor or non-profit credit counselling organisations when you start falling into debt.

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