If you don’t pay for your credit card for approximately six months, then the lender will turn your account over to a collection agency. Taking action before it gets to this point is ideal, but you can still resolve your debt before the situation becomes even worse. Try one or more of the following ways to pay off your credit card fast!
1. Make Sure the Debt is Yours
It’s surprisingly common for debt collectors to start calling you over an unpaid amount that’s not actually yours. Whether they’re misinformed or trying to pull a scam, it’s vital to know how to dispute any errors listed on your credit report. However, if the debt is legitimate, confirm it and make a plan to pay it off.
2. Be Aware of Your State’s Statute of Limitations
Did you know that you might not be legally responsible for your debt? Once your debt is between three and 10 years old, it becomes illegal for a debt collection agency to sue you. In other words, although they may still try calling and sending letters, you don’t have to respond. In fact, responding might reset your debt clock back to zero.
3. Try Negotiating with the Debt Collector
It’s quite common for a debt collector to accept a smaller amount than what you actually owe. Discuss your financial situation honestly with them. If they still don’t offer you a percentage off your debt, you can suggest a lump sum payment that will resolve your unpaid credit card.
4. Enter a Repayment Plan
There are times when you absolutely can’t afford to make a lump sum payment. In these situations, it’s best to enter into a repayment plan. Be cautious, though, about accepting a monthly payment that you can’t actually make. Even if they tell you that $75 is the lowest monthly amount they can accept, it’s better to stick to your guns by repeatedly stating that $50 is all you can pay. Once you have an agreement, get it in writing so there will be no confusion later on.
5. Honor Your Repayment Plan
Making each monthly payment on time will be crucial. If you run into trouble, though, be sure to reach out to the collection agency before your due date. Open communication is the best way to prevent further legal action.
6. Consider Using Your Tax Refund
For most Americans, tax refund time provides a financial windfall. Whether you pay off your entire debt with your refund or offer a lump sum settlement, it’s wise to take advantage of this annual infusion of cash to resolve financial issues.
You should keep a close eye on your credit report once your debt has been resolved. Some companies will not automatically report that your debt has been repaid. If you find this to be the case, you’ll need to contact the agency and request they delete your account. As long as they remove your resolved debt from your credit report within 30 days, though, they’ve met their obligation.
