Fees
From your perspective as the borrower in trouble, this makes no sense at all. You’re having a short-term problem making ends meet, so what do your creditors do to help you? They add some fat fees onto your balance. Thank you very much.
How do these fees help you? They don’t. The fees helps the creditor in two ways:
“They focus your attention on their bill, instead of someone else’s.” The creditor gets compensated for the extra risk you just became.
As bad as the fees can be on your credit cards, they can be even worse on your secured loans. If you fall behind in your house payment three months, you can be hit with huge fees to the tune of thousands of dollars. Check your credit report instantly and repair your credit score.
Secured lenders tend to be low-key. Don’t let that calm voice or polite, non-threatening letter lull you into complacency. They’re low-key because they don’t have to shout - they’ll very quietly take your home or other collateral, unlike the credit-card guys, who can be heard across the street. Pay attention to the quiet guy, and take action.
Late fees, over-limit fees, legal fees, repo fees, penalty fees, deficiency payments, and default rates: When the fees show up, its time to get serious. Call the creditor and ask to have the fees waived. Explain your plan to get current and let them know that you need their help, not their fees.