If you think that your financial difficulties are only temporary, you have the option of making minimum payments to your creditors until your finances improve. By continuing to make minimum payments you will protect your good credit rating and avoid collection letters and phone calls. It’s important to remember that you must stop using your credit cards immediately so that you avoid the danger of getting even deeper in debt.

Making minimum payments to creditors is not a good long-term option. This is because these payments are very small compared to the total balance due, and making only these small payments will keep you in repayment for many years to come.

EXAMPLE:
If you owe $5,000 on a credit card with a 19% interest rate, your minimum payment will be approximately $100. If you make payments of $100 per month you'll repay your outstanding balance in 100 months - that’s over eight years! But remember that as your balance goes down so does your minimum payment, so if you’re going to pay $100 per month you must resist the temptation to lower your payments to match the minimum amount due.