When you take out a credit card and use it to charge a purchase, you are agreeing to make payments within the terms of the agreement that you have with a bank or finance company. If you break that agreement, the bank or finance company that issued your card is likely to take steps to punish you.

However, many people find themselves in financial trouble at one time or another in their lives. This is no time to panic. It’s a time to take the right actions to resolve the situation and minimize the pain.What Happens When You Get Behind on Credit Card Payments?

If you are even a little late with a payment, your lender may charge you a late fee or increase your interest rate. If get far behind, the credit card company may start reporting you to credit bureaus and call you constantly for a payment. In the end, the creditor might even resort to legal action.

This is a very stressful situation for borrowers who can’t come up with the minimum payments for their credit cards. The situation is almost never resolved by ignoring it. However, you can take some steps to reduce both your stress and the amount of money you may need to pay in penalties:

Call your creditors:
Ideally, you should contact your creditor as soon as you know that you can’t make a minimum payment. Almost all banks and finance companies have programs to help their customers get current, and they might be able to work with you to find an acceptable solution.

Consider alternative methods of raising funds:
You might be able to tap into your home equity or arrange a personal loan to consolidate your debt under more favorable terms. If you can, you can use these low-interest loans to pay your credit card debt. It’s better to research these alternative loans before your credit score drops, so act quickly.

Visit a legitimate credit counselor:
A credit counselor may be able to help you find other solutions to reduce or even eliminate your debt crunch. Make sure you research these services before you decide anything. For example, you can visit the Federal Trade Commission website for tips on how to find approved credit counseling organizations all over the United States.

Don’t Ignore Your Overdue Credit Card Payments:
Really, the worst thing you can do is ignore your overdue bills. Credit card companies are famous for slapping on penalties that will only make the situation worse. If you ignore these companies too long, they could even begin legal action. If you can’t pay your credit cards, you probably can’t afford a lawyer. At the same time, your credit scores will keep dropping, and this can hurt you in the future.

Of course, you can file for bankruptcy protection, but that can also be an expensive process. If you can’t pay your credit card bills, it’s best to look for alternative ways to cope with the situation as quickly as possible. Your credit card company, other finance companies, or credit counselors might offer help.