The Credit Guy

Lost your job? What to do if you can’t keep up with card payments

The Credit Guy columnist Todd Ossenfort

Todd Ossenfort has been chief operating officer for Pioneer Credit Counseling since 1998. He writes our weekly “The Credit Guy” column, answering reader questions about credit counseling and debt issues.

Ask a question.


Dear Credit Guy
Hello, I’m 19 and owe $2,000 on my Bank of America credit card. I have been paying minimum payments, but just can’t pay anymore due to unemployment. How can I get out of this debt? – Oday


Dear Oday,
I am so sorry to hear that you are unemployed and don’t feel like you have the resources to pay your debt back. With no money coming in, I know that $2,000 can feel like it might as well be $1 million.

I do applaud your attempts to keep up with the minimum payments. Unfortunately, minimum payments are usually structured in such a way that actually paying an account off is very difficult. This is especially true if your interest rate is high.

The industry standard minimum payment is all fees and interest due that month plus 1 percent of the principal amount owed.

Possible consequences of not paying card debt
Before you decide to simply quit paying on your account, I want you to know what this would mean for you in the long run.

  • Bank of America extended this credit to you in good faith and you did use the card for at least $2,000 worth of purchases. Calling them up and telling them you won’t be paying anymore won’t be the end of it. Until you can come to some kind of agreement with the bank, they will continue to look to you for payment.
  • If you don’t pay, your nonpayment will likely be reported to the credit reporting bureaus. They could also turn your account over to a third-party collection agency. This would result in numerous attempts to collect via phone calls and letters.
  • If you ignore these attempts, you might be sued and have to go to court. If you don’t show up for your court date, you will lose and could have a judgment placed against you.
  • On top of that, you should also know that missed payments and collections will show up on your credit report and will definitely have a long-term impact on your credit score.


Video: How a side hustle can help you pay down debt

Impact on job search
I know that because you are unemployed right now, your credit score is probably the last thing on your mind.

However, you need to know that credit reports are not only important when seeking financing. Insurance companies, landlords and, yes, even employers can look at your report.

I am not saying that a $2,000 debt will necessarily keep you from getting a job. But if you are up a for a job with other candidates and your prospective employer does look at your credit report, this might tip the scales in favor of another candidate with a better report.

A viable solution to paying debt
My advice is that you contact a reputable nonprofit credit counseling agency for help.

  • These agencies already have agreements in place with most major creditors that could reduce your interest rate and might even reduce your minimum monthly payment to something that is more affordable for you right now.
  • A part-time job might bring in enough to cover a lowered payment, so you could expand your job search in that direction.
  • During your counseling session, your counselor will look at your whole financial picture to see if a debt management plan is right for you.
  • They will also take you through all of the other options for your debt – including borrowing from friends or family, debt settlement and bankruptcy – to help you decide on the right course of action.

You can find a list of qualified credit counseling agencies at the Federal Trade Commission’s website.

Take care of your credit!

See related: Tips, tools for setting up a side gig to get out of debt, Can’t afford monthly card payment? Try these options

Meet’s reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday,’s Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.



What’s up next?

In The Credit Guy

Q&A: Should I close high-limit, zero-balance cards I don’t use?

If you have several credit cards with high limits and no balance, which you hardly use, you might consider closing one of them, especially if it has an annual fee. Just make sure to keep your oldest cards open.

Published: October 14, 2017

See more stories
Credit Card Rate Report Updated: August 14th, 2019
Cash Back

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.