As great as a tool a credit card may be, sometimes people find themselves in over their head with debt incurred from its use.

When someone falls behind on a credit card, a few things can happen. First, there is almost always a late fee added to the balance, usually ranging from $15 to $50 depending on the balance and company. Also, the interest rate will be moved up to the default rate, which can be up to 29.99 percent, depending on an individual’s history and the company.

After either the first or the second missed payment, the credit card companies will report to the credit bureaus with a R2 rating.

The R in the R2 means that the credit type is revolving, meaning that there can be a balance from month to month that can change. The 2 stands for an account that has fallen 30 day past due. These ratings go from R1, or “good standing,” to R9, a bad debt or charge-off.

Charge-off is when the company writes the debt off their books for tax and other reasons. However, this does not mean that debtor no longer has to pay. The balance is still collectable for up to 7 years from the day the debtor stopped paying and never brought it current. This is the point where the companies decide to keep the debt, sell the debt, or possibly file a lawsuit.

When people find themselves in situations with too much credit card debt, they can seek solutions from numerous sources. These solutions can be anything from working with the credit card companies, consumer credit counselors, or debt consolidators and settlements.

Credit card companies can provide payment options to people depending on their situations and what the companies want to do and are able to do. There are different programs offered, depending on each individual company. Some possible examples are fee wavers, balances payoffs with fees taken off, payment programs, interest rate reduction programs, and hardship programs.

Consumer credit counselors work with people in several ways. One of the more common ways they help is by working with a client’s creditors to get lower interest rates and payments. Also counselors can help people learn to mange money and work out a budget. When working with counselors, a debtor’s creditors will usually close open accounts.

Consolidators work with people by helping them settle their debts. Typically, people make monthly payments to the consolidators while their accounts charge-off. After charge-off, they negotiate a settlement for less than what is owed. When a settlement is reached, credit card companies will report to the credit bureaus that the debt was settled. Also, the forgiven portion of the debt becomes income and is taxable.

During times of financial hardship, it is best for people to do their own research and to find help from a legitimate financial professional.