Though credit card delinquency rates have begun to fall after reaching a peak during what we now refer to as The Great Recession, there are still millions of Americans struggling to get out of delinquency.  Because many of these people are fighting credit card payments, it’s key to understand how delinquency works–and it’s not as straightforward as it might seem on the surface.

Whether or not making a payment is sensible depends upon how credit card companies actually determine delinquency.  For example, suppose the minimum payment is $50 and the credit card holder can only pay $25. It won’t help to pay less than the minimum payment because the credit card holder will still be considered delinquent and will still have to pay late fees.  Therefore, one must pay the minimum payment in full to avoid delinquency.  In this particular case,  the card holder’s best bet would be to set aside the $25 and make the payment when he can pay the $50 in full. That will help to minimize a fall down the slippery slope of delinquency.

Now let’s suppose the cardholder missed a few payments, but finally got a job and is trying to get back on track. For this example, we’ll suppose he missed two $50 payments and has another $50 payment due to become current on his credit card (a total of $150).

In order to fully climb out of delinquency, he would need to pay $150.  If he pays less than that he will be charged late fees and will still be considered delinquent, but he can start to reduce his level of delinquency.

By level of delinquency, I’m talking about how one’s credit card company likely reports late payments to the credit bureaus.  The key here is the number of days delinquent. These are delinquency ranges:

• 1 to 29 days – During this period the credit card companies do not yet report a delinquency to the credit bureaus.  If a cardholder can pay in full before the 30th day he can avoid a negative report on his credit history. In this case the cardholder would have missed a payment but is not yet 30 days late.

• 30 to 59 days – Credit card companies will report a delinquency but it won’t hit one’s credit score as hard. In this case a cardholder would be 30 days late on one payment and more than one day late on two payments.

• 60 to 89 – One’s credit score will be hit hard.  For someone who has been an on-time payer, his score could drop as much as 100 to 125 points.  In this case the cardholder would be 60 days or more late on one payment, 30 days or more late on two payments and more than 1 day late on three payments.

• 90 days to 119 – Depending on the credit card company an account could be turned over to collections at this point. One’s credit score will continue to drop.  In this case the cardholder would be 90 days or more late on one payment, 60 days or more late on two payments, 30 days or more late on three payments and more than 1 day late on four payments.

• 120+ days – Collections calls will increase and the impact on one’s credit score will be greater. In this case the cardholder would be 120 days or more late on one payment, 90 days or more late on two payments, 60 days or more late on three payments, 30 days or more late on four payments and more than 1 day late on five payments.

Now let’s take a look at what happens when one makes a partial payment and how this  impacts delinquency levels.   When a person makes only the minimum payment, he stays in the same delinquency range.  For example, if he owes two minimum payments, he’s in the 30-to-59-day range.  If he pays only one of those two minimum payments, he’ll stay in the 30-to-59-day range.  He won’t fall further down the delinquency slope, but he’ll still be reported as being past due in the same range.

In this example, in order to go back to current status, a cardholder would need to pay the two missed payments plus the current due payment.  So the cardholder would have to pay a total of three payments.

Once a cardholder becomes current on his credit card bills, he should start counting the months.  After six months of on-time payments, he has the right to ask for a reduction in interest rate under the new CARD Act.

Whenever a credit card holder misses some credit card payments, he will likely find that the credit card company has lowered his credit card limit and/or removed charging privileges.  He may find that he has no credit card to use for critical things such as travel or hotel reservations, which often can’t be placed without a credit card.   He will need to rebuild his credit card reputation as he moves out of delinquency status and show the credit card companies he will pay on time.

Even if the credit card companies have revoked available credit, he may still be able to get that needed credit card using a secured credit card.  With a secured credit card one’s credit limit is equal to a refundable security deposit he places in opening the card.

Additionally, someone who is finding he just can’t get above water may want to consider getting debt help.  There are three types of assistance one can consider: debt settlement, where one stops paying his credit cards and negotiates a settlement that is less than the full amount due; debt management, where one works with a credit counselor who will help to get interest rates lowered and work out a payment plan one can afford; or bankruptcy, where debt is wiped out altogether.

The one thing a person should not do is let his bills pile up on a table unopened while he gets bombarded with calls from creditors. Continuing to ignore a delinquency will just move a person further and further down the delinquency slope.  People should seek help when they can’t make their minimum payments so they can avoid moving into more and more serious delinquency on their credit cards.