Credit card debt is a type of debt that increases with time. If an individual chooses to pay only the minimum on their credit card bills each month, they are subjecting themselves to interest fees. These fees may have a large negative effect on an individual’s budget over time.

It is important to remember that the minimum percentage rate that is established by a lender is intended to ensure that the individual does not completely pay off their debt for as long as possible. When an individual only pays the minimum required amount, they are subjecting themselves to years of payments with extra interest fees in addition to what they already owe.

The faster an individual can pay off their credit card bill, the less amount in extra interest fees they will have to pay. As a result, they will save money. This is why paying off credit card debt completely should be a high goal in an individual’s financial planning.

How Can I Pay My Credit Card Debt Faster?

Paying off credit card debt can be difficult. One strategy to do so is to develop a plan and to follow it. There are some ways to help an individual pay off their credit card debt, including:

  • Target one debt at a time;
  • Pay more than the minimum payment;
  • Consolidate balances; and
  • Creating a budget.

By targeting one debt at a time, an individual may be able to pay more than the minimum payment and pay off that debt faster. Then, move on to the next credit card with the lowest balance and do the same. Begin with the card that has the lowest balance and move up from there.

Paying more than the minimum payment is advisable for an individual who wants to pay off their debt. By doing so, an individual can avoid high interest charges.

Consolidating balances into one can help an individual stay organized and ensure they do not miss payments. This may also help pay down the balance faster.

Creating a budget is also an essential step in paying down any debt. By creating a budget, an individual can determine where their money is going and use what they save to pay off their credit card balance.

What if My Credit Card has a High Interest Rate?

If an individual’s credit card has a high interest rate, they may want to look around at interest rates on other credit cards. It is important to note whether the credit card has a fixed APR or a variable APR. It is important to find the credit card with the lowest interest rates possible.

Once an individual has found the credit card with the lowest possible interest rate, they can compare it to their current credit card. If their credit card has higher interest rates, they may be able to call their current credit card company and negotiate a lower rate.

An individual can inform their credit card company that they found another credit card that has a lower interest rate and they plan to switch accounts unless their rates can be reduced to match the competitor’s they are considering. If they have a good credit history, this tactic will likely be successful.

Another option would be to find a credit card that is offering a 0% balance transfer and transfer the balance from the higher interest rate card to the lesser interest rate card. It is essential to keep up with the length of the balance transfer offer, however, because if the balance is not paid within that time, the individual will be charged back interest.

Can I Get Sued Over Credit Card Debt?

Yes, it is possible to be sued for credit card debt. If an individual falls behind on their monthly payments, a lawsuit can be filed by their credit card company pursuant to the Fair Debt Collection Practices Act.

Before a credit card company files a lawsuit, they will usually freeze the individual’s account so it can no longer be used. Although the account is frozen, interest will continue to accrue.

Every credit card company may follow its own protocols regarding credit card lawsuits. Typically, the progression of events is as follows:

  • The individual breached their agreement with their credit card company;
  • The credit card company may sell the debt to a debt collector;
  • The credit card company or the debt collector sues the debtor;
  • The debtor responds to the complaint; and
  • The debtor attends their court date.

When an individual accepts a credit card, they sign an agreement, usually electronic. This agreement provides the rights and duties of the credit card company and the individual who will be using the card.

Generally, if an individual gets behind on their monthly payments or stops making payments altogether, they have breached their agreement. If the credit card user breaches the agreement, the credit card company has the right to sue them.

In order to try and avoid a lawsuit, the debtor can attempt to negotiate with their credit card company, or, if possible, pay off their debt. A credit card company may attempt to cut their losses by selling the debt to a debt collector. If possible, the individual should attempt to settle their debt with any debt collectors in order to avoid a lawsuit.

Does the Coronavirus Affect Credit Card Debt Options?

The coronavirus pandemic may have an effect on lawsuits regarding credit card debt. The COVID-19 pandemic has affected civil courts throughout the United States, causing criminal cases to be prioritized over less urgent civil cases.

In some jurisdictions, courts are temporarily stopping, or tolling, civil statutes of limitations in order to reduce backlog in the court system. Additionally, many credit card companies and lenders are providing customers with financial relief by adjusting payment requirements if they have been affected by the pandemic.

It is important to seek the advice of a local attorney regarding the effect on the court system in the area. Individuals may also contact their credit card companies and lenders in order to determine if they are offering any type of assistance, such as fee waivers or deferred payments.

Lenders that report data to the credit bureaus will not cause credit scores to go down at this time, as required by the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Many financial institutions are providing options for customers who have been impacted by COVID-19, which may include:

  • Lowered monthly payments;
  • Waiver of late fees;
  • Temporarily lower interest rates; and
  • Other options.

How Can I Manage Debt During COVID-19 Conditions?

Managing debt during the COVID-19 pandemic may be difficult, especially if an individual has been impacted by job loss. In addition to the options provided by financial institutions, the government also provides assistance.

The Consumer Financial Protection Bureau (CFPB) is a government agency which works in the area of consumer finances. In response to the pandemic, this agency is providing education and guidance for consumers whose finances have been impacted by the pandemic.

Do I Need to Hire a Lawyer for Help with Credit Card Debt Issues?

Yes, it is essential to consult with a credit lawyer with experience in consumer credit if you are having any credit related issues. Your attorney can provide advice regarding the current situation in the courts and with financial institutions during this time.

Your attorney can review your financial situation, advise you regarding what protections you may have from creditors pursuant to state and federal laws, and assist you in creating a plan to pay off your debt. Your attorney can also represent you if a lawsuit has been filed against you due to credit card debt.