credit card nightmaresAs the Halloween moon comes upon us, casting its jack-o’-lantern glow and haunting us once again, thoughts of credit card nightmares have crept into the minds of those of us at NextAdvisor. While there are horrifying credit card situations you can get dragged into if you aren’t taking the right financial steps, there are some preparations and tactics you can undertake to avoid getting trapped by these terrifying nightmare scenarios. To help, we’re detailing some of the most hair-raising and gut-wrenching credit card scenarios you fear – and what you can do when you face them.

Nightmare No. 1: You have a high APR and credit card debt

You know that it isn’t because of witchcraft, but lately, you feel as if you’ve been cursed when it comes to anything credit-related. For example, you recently found out that you’re in credit card debt and your card’s APR is sky-high. To layer on the terror, the Federal Reserve decided to raise the federal funds rate, so your credit card interest rate will rise if it has a variable APR. Clearly, this ghoulish situation doesn’t match the hefty credit card benefits you were daydreaming about when you initially opened this card’s account.

What you can do

With some negotiation skills and a bit of hocus pocus, you can dig yourself out of that crypt of a situation you’re in. One of the first steps you can take is to contact your credit card issuer to ask for a lower APR. Try negotiating for that lower interest rate by presenting a convincing argument that shows why you deserve it (e.g., you’ve been a loyal customer for X years and you’ve paid every bill on time). While doing so doesn’t guarantee that you’d be able to get that better rate you’re vying for, it doesn’t hurt to try. After all, you can stand to gain a treat by doing so, and in the case that your issuer can’t accommodate your request, you won’t have much to lose.

Another option you could look into is to transfer your balance to a credit card with a lower interest rate, and here’s where that bit of hocus pocus comes in. By doing so, you’ll be able to have more time to pay off your balance and an easier time paying it off, given the lower interest rate. You will likely have to pay a balance transfer fee of 3% to 5% of the transferred balance, depending on the card, but this one-time fee is usually much lower than your current credit card interest, meaning you’d still come out money-ahead. To get started on finding a credit card that could provide such an opportunity for you, check out our balance transfer credit card reviews and use our free Balance Transfer Calculator to see the best options for your transfer amount, monthly payment and credit rating. Other steps you can undertake include budgeting (make sure you include your credit card payment and any purchases you plan to put on the card), familiarizing yourself with your credit card’s terms and making on-time payments.

Nightmare No. 2: You missed a credit card payment

Ah, it’s the stuff of credit card nightmares that could make you wake up in a cold sweat: missing a credit card payment. When you’re juggling multiple jobs, herding your children at pumpkin patches and figuring out how to pay off heavy bills, it can be easy to miss one. However, as you may have heard, doing so can be a huge misstep and draw severe consequences. Potential costs could include hefty late fees, a higher APR as well as slashed and damaged credit scores that could come back to haunt you. If you miss multiple credit card payments, the nightmare can get worse. That’s because missing multiple payments could result in your debt being sent to collections, resulting in stains to your credit reports (something undesirable that could make for a real-life horror story, which we’ve covered in the past).

What you can do

It may feel tempting to “fly away on a broom” and to just let the fire burn and cauldron bubble, but one of the best steps you can take is to ground yourself and work to reduce your chances of missing payments in the future, as there are some preventative measures you can undertake to do just that. Consider setting up automated payments and using your budgeting skills to push this monster of a personal finance nightmare back. Also, note that making a succession of on-time payments is the best chance you have at getting your penalty APR reduced if that’s a consequence you’re facing. If you find that you’re having trouble footing the bills because of a dire situation, such as a medical emergency, it could be wise to also contact your bank or credit card issuer to figure out the best plan to tackle your payments. To learn more about what you can do to stay un-zombified, proactive and alert when it comes to improving your credit health, check out our post about missed payments.

Nightmare No. 3: Your credit card is lost or stolen

After a late night out feasting on pumpkin spice cupcakes and candy apples, you reach into your purse, only to find that your wallet and credit card have been stolen. Or perhaps you had a hectic day that involved running from grocery store to grocery store to get that Halloween party ready, but to your dismay, you realize that you may have accidentally misplaced and lost your credit card somewhere along the way. Or maybe you have your credit card on hand, but you get an ominous call from your bank asking about mysterious transactions that you know you’ve never made.

Losing your card or getting it stolen is one of the most horrifying credit card nightmares, especially when you think about credit card fraud (i.e., when someone uses your card to make unauthorized transactions) and its implications (e.g., identity theft). Luckily, there are certain steps you can take to mitigate the consequences of a lost or stolen credit card – no witchery needed.

What you can do

On the bright side, if your credit card is stolen or lost or if a sorcerer makes it disappear, you’ll get more protection than you would if your debit card or cash were gone. That’s because the Fair Credit Billing Act (FCBA) caps your liability of unauthorized charges made through your card at $50 — cards with $0 fraud liability are completely covered — and if your credit card’s number is stolen instead of your card, you aren’t liable for the charges. As a comparison, if your debit card is lost or stolen, your liability is based on how quickly you can report the unauthorized charges. And it goes without saying that stolen cash could go poof and be gone forever.

Besides these protections, there are several steps you can take to better mitigate the consequences and better prevent such happenings in the first place. For one, it’s good to report your stolen or missing card as soon as possible via your credit card issuer’s mobile app (if it exists), your issuer’s phone number (such as the trusted one you may be able to find on the back of your card, which you should save in your contacts in case situations like this arise) and locking your card via your computer or cell phone if that type of feature is available to you, like Discover Freeze it and Citi’s Quick Lock (a NextAdvisor advertiser).

There are steps that you can take to better prevent credit card fraud as well, including checking your balances and statements, using a chip card, selecting strong passwords for your online accounts and more. To find out more ways for you to circumvent this nightmare, read our guide to preventing credit card fraud.

Now that you know more about credit card nightmares and how to vanquish or transform those terrors through troubleshooting and preventative steps, learn more about how you can better secure and improve your financial health. To do so, keep tabs on our personal finance blog.

Disclaimer: This content is not provided or commissioned by the credit card issuer. Opinions expressed here are author’s alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. This content was accurate at the time of this post, but card terms and conditions may change at any time. This site may be compensated through the credit card issuer Affiliate Program.