How To Avoid Credit Card Collections

Posted February 3, 2014 by CCC Staff in


You had every intention of paying off your credit card. Then life happened. You got laid off. Your kid had to have an emergency tonsillectomy. Your car broke down and needed a major overhaul. Now you can’t pay your credit card bill, but you don’t want it to go to collections. What do you do? Don’t worry, you still have several options to keep your credit report looking tidy.

Here Are Five Ways To Avoid Credit Card Collections:

1. Make a Call

There are a lot of times when a people sit on their hands instead of taking action. This shouldn’t be one of those times. As soon as you realize you’re going to be late with your payment, call your credit card company.

If you don’t have time to sit on hold, or just hate talking to customer service, use their website’s live chat feature. MBNA and CIBC both offer online chat services. You can also contact service reps via Twitter, such as @AskRBC or @AskAmexCanada.

You might think that letting your credit card company know that you’re going to be late is a waste of time. If you’re late, you’re late, right? Actually, credit card companies are a lot better at helping out if they know you need help. Otherwise they may just think you’re a hoser that doesn’t want to pay his bill.

2. Work Out a Deal

Okay, so you didn’t call your credit card company and you’re already several payments behind. It’s too late and a trip to collections row is inevitable, right? Hold on, not so fast. You still can be redeemed.

Credit cards don’t want you to default. They want to keep you as a customer because it costs 3 to 30 times more to get a new customer than to retain an old one. Plus, you provide them with a generous amount of interest. So, credit card companies are going to do whatever they can to keep you.

Often, companies will allow you to make your own payment terms. For example, you can call them up and say, “I don’t have the full payment now, but I can pay you X amount today and X amount next week.” You might be surprised at how quick they are to agree to your terms.

3. Let Them Make You an Offer

Don’t have a clue what you are able to do in terms of an offer, or they simple rebuffed the offer you did make? Simply ask them what your options are. They will usually have at least two options to choose from. For example, they may offer a weekly payment plan or you may be able to make a down payment now, then increase future payments.

4. Contact Customer Retention

Maybe you’ve made a call, offered a payment, asked for options and came up with nothing. This is where you get down to playing hardball. Call up your customer service department and ask right away to be transferred to the customer retention department. These individuals have more power to make special deals than your average customer service rep.

5. Find a Credit Counselor

If all else fails, you may need to find the money to pay your bill right away. This task may seem insurmountable, but never fear. Contacting a credit counselor is a smart way to help you deal with your debt and keep it under control.

Don’t let your credit cards languish and be swept up by collection agencies. Fight back and use these tips to keep your credit score clean.