Dear Debt Adviser,
I am having trouble making the minimum payments on all my credit cards. What will happen if I pay less than the minimum payment? Should I try to negotiate a lower payment first?
— Paula

Dear Paula,
I wish I had a dime for every time I have heard someone say, “I am having trouble making minimum payments.” If I did, I could give you the money and you would not only have enough money to make minimum payments, but also to pay your balances in full with plenty left over! Yours is a very common problem experienced by millions of Americans each month. Perhaps I can clarify things, if I first simplify them.

Let’s say you promised a friend that you would baby-sit for four hours. Now you find you can only do it for two hours. Do you a) not say anything and leave the kid alone after two hours, b) stay up nights trying to figure out how to be in two places at the same time, c) call a friend to help you cover or d) call the mom and explain your situation and offer to sit for two hours, if that will help. It’s very similar with your creditors.

You ask what will happen if you just pay less than the minimum. This choice is like answer a) above. It’s not the most responsible option and will certainly cause you problems. You will have broken your agreement and will be assessed a fee of up to $39 that will add to your balance and to your minimum payment the following month. Do it often enough and the entire amount becomes due! Additionally, you may go to a higher penalty interest rate.

Contact the creditors

Your next question is: Should you try to negotiate a lower payment? This is the credit card equivalent of answer d). Contacting your creditors is a good place to start. Let them know your financial situation and that you are having trouble keeping up with payments. If you are experiencing difficulty paying because of a lifestyle change such as divorce or job loss, let them know that as well. You may qualify for a hardship program of some type to help you pay off your balances.

As in the case of your friend, the creditor may be miffed that you promised one thing and now want to do another. By admitting your financial difficulties, your creditor may view you as an increased risk and raise your interest rate. Although it seems the opposite of what should happen, it is within your creditors’ rights to do so. Weigh this option carefully.

Get some counseling

Another option, choice c), may be to sit down with a reputable credit counselor and discuss your options for solving your immediate problem of making minimum payments and to eventually pay down your debt. They will help you determine the reasons that you are in your current financial situation and help you develop an action plan to avoid the same situation in the future. Be sure to ask the counseling agency if they will give you an action plan. If they do not, then call another one; this really is important and often separates the legitimate agencies from the pretenders.

If you chose b), you are very likely to be at the same breaking point, unable to make minimum payments on your credit card accounts next month. Do yourself a favor, learn from your experience, take action and stop worrying.

How long will it take? Use Bankrate’s calculator to see how long it will take for you to pay off your credit cards. You’ll need to know your balance, your interest rate, and your monthly payment.

Good luck!