Can I Pay Only Interest on My Closed Credit Card Due to Financial Changes?

Credit cards can be a useful financial tool, allowing you to rack up points or cash back on everyday purchases. But there can come a point when credit card debt gets out of hand. And then, if your financial situation changes for the worse, it can suddenly become even more challenging to keep up with your payments.

That’s the situation someone writes about in this Reddit post. Here, we have someone who’s looking to temporarily only pay monthly interest on a credit card balance of theirs because of a change in employment status. And the poster is concerned about the impact on their credit.

Frankly, the poster should be concerned. But that doesn’t mean they don’t have options.

When you encounter a financial hardship

Credit card companies make a lot of their money from users who carry balances forward and rack up large amounts of interest on their debt. But ultimately, what credit card companies want is to get repaid. And they may be willing to work with you if you’re experiencing a change in financial circumstances that’s making it tough to keep up with your obligations, including your minimum monthly payments.

The problem with not making your credit card minimum payments is that you risk damaging your credit score if you fall behind. Late payments are routinely reported to the credit bureaus, and even a single late payment could damage an otherwise solid credit score.

But if you contact your credit card issuer and explain your circumstances, you may be eligible for some leeway — especially if you have proof of a financial hardship.

In the situation above, the poster mentions a change in employment. Losing your job could make it difficult to keep up with credit card payments. What a credit card issuer might do, though, is allow you to pause those payments for a few months while you look for work.

If your credit card company allows you to do this, ask for something in writing and confirm that you won’t be reported to the credit bureaus as delinquent on your payments. But ultimately, your credit card issuer wants to get paid, so it may be willing to cut you some slack so you can regroup and then start making payments again.

That said, one thing you should know is that if you’re allowed to pause your credit card payments for a while without a negative credit score impact, you might still rack up interest on your unpaid debt while your payments are paused. And that could lead to higher payments once you’re ready to start making them again.

So make sure you get all of the information from your credit card company if you’re going to be asking for a grace period. That way, there won’t be any unwanted surprises down the line.

Negotiating your debt may also be an option

The poster above says their employment status has changed, but they don’t elaborate. It may be that they’re out of work and don’t see themself getting a new job anytime soon.

In that case, another option may be to try to negotiate their credit card debt — either on their own or with the help of a debt settlement company. A credit card company might agree to settle for a partial payment that satisfies the debt if it means getting paid something.

You should know, however, that debt settlement could have a negative impact on your credit score. But then again, so can late payments or delinquencies. So you’ll need to weigh your options carefully if you’re in a situation where you don’t think you’ll be able to make payments on your credit card debt for a very long time.

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