Separation can be tough, not only because of its emotional toll but also because there can be financial obligations. If kids are involved, you might have to make monthly child support payments after a divorce or separation from your child’s parent. The money is intended to help pay for your child’s living and medical expenses until he or she is an adult.
You may have the option to pay child support with a credit card, and if money is tight that might seem like a good idea. After all, it’s one way you could provide for your children even if you don’t have the cash. But is this a smart move? The answer is generally “no”, but first let’s take a look at what child support is, how you might be able to make payments, and the consequences for failing to make a payment.
Who Pays Child Support and How Much Will You Have to Pay?
Often child support payments will be made by the non-custodial parent–the parent without physical or legal custody of the child. However, there are also cases where custodial parents make child support payments to non-custodial parents. Or, when parents have joint custody, the parent who has higher income could have to make child support payments to the other parent.
A judge may determine how much you’ll need to pay each month based on a state-determined formula and particulars of your case. The formula and judge might take into consideration both parents’ incomes and financial responsibilities, where the child will spend most of his or her time, who’ll be responsible for the child’s medical care and day care, and whether or not either parent is also responsible for another child.
You may be able to estimate your child support payments using an online calculator (search for your state and “child support calculator”). AllLaw.com also has state-specific calculators that you can use as a basic guideline.
How Might You Be Able to Make Child Support Payments?
Depending on where you live and the court order, your child support payments might be automatically taken out of your paycheck. If you need or want to make a payment, you could have several other options, including:
- Online. Use the state’s website to make a payment using a debit or credit card, or with a bank transfer.
- Online with a third-party service. Some states require you make online payments through a third-party payment processor. Depending on the processor, you may be able to choose between using a credit card, debit card, or setting up a bank transfer.
- By phone. Call the state agency and make a payment using a debit or credit card.
- Using a mobile app. Some states have free mobile applications that you can use to check upcoming appointments, review previous payments, and make a payment.
- Snail mail. You may be able to send a check or money order, but not cash, through the mail. When sending a payment by mail, you might have to include identifying information, such as your name, participation number, case number, and Social Security number.
- In person. In some areas, you can make a payment in person with a check, money order, credit card, or with cash.
- Using the PayNearMe network. PayNearMe lets people pay their utility, loan, phone, or child support payments with cash at over 17,000 retail locations. The service is offered at several popular retailers, including 7-Eleven and Family Dollar.
- With a money transfer. Send money using a money-transfer service, such as Amscot or MoneyGram. Payment processing can take several days when you use this method, and you may need to pay a transaction fee.
When Can You Stop Making Child Support Payments?
Child support payments could end when the child reaches the “age of majority,” 18 in most states but up to 21 in several. However, if your child is still in high school or attending a vocational or post-secondary school, you may need to continue making payments until graduation. You could also need to continue making payments after the age of majority if your child is mentally or physically disabled.
Child support payments might stop before the child reaches the age of majority if the child gets married or voluntarily withdraws from parental control.
What If You Lose Your Job?
Loss of a job, incarceration, or military deployment don’t necessarily stop your responsibility to make child support payments or lessen the amount you owe each month. Generally, only the court that originally issued your child support order has that power.
When you’re unable to make payments due to a change in your living or work situation, contact the court and proper state organization immediately. Past-due payments might not be forgiven because of an inability to pay, but the court could make a temporary or permanent change to your child support payments.
Potential Ramifications of Missing a Payment
Depending on where you live, how much you owe, and how behind you are on payments you could face severe consequences for failing to make child support payments.
- Your driver’s license could be suspended.
- Your state business or contractor license could be suspended.
- You might not be able to get a passport.
- Payments will be taken out of your wages, workers’ compensation, unemployment, or disability benefits.
- A property lien could be placed on your home or land.
- Money in your savings or checking account could be seized.
- Your vacant land, vehicles, or safe deposit boxes could be seized.
- The amount owed could be taken from your federal tax refund.
- If you win the lottery, the amount you owe could be taken out of the winnings.
- Money could be taken from civil awards or settlements you win.
- Your late payments could get reported to the credit bureaus.
- You could be sent to jail or prison.
Past-due child support payments – also known as arrears – don’t disappear. You’ll still owe the arrears after you don’t need to make new payments. Even bankruptcy doesn’t discharge past-due child support. Plus, in some states, arrears also accrue interest until you pay everything owed.
Should You Make Payments Using a Credit Card?
Back to the original question – should you use a credit card to make a payment?
Perhaps you want to use a rewards credit card and get points or miles. However, the fees charged by the state or a third-party processor could more than offset the rewards you’ll receive from a credit card:
- The payment processor that Texas uses charges a 2.55 percent fee for credit card payments.
- New York’s state online payment partner charges $14.95 for payments of $0 to $500, and 2.95 percent on payments of $500.01 or more.
- Georgia’s state agency charges $1.50 per transaction, plus 2.5 percent of the payment plus the $.150 fee.
- If your rewards more than offset the fee and you can pay your credit card bill in full each month you might want to consider making child support payments with your card.
But what if you’re considering using a credit card because you can’t afford a payment? A credit card could be an expensive route. In addition to the processing fees you’ll have to pay interest on the balance if you can’t pay the credit card bill in full.
The average interest on a variable-rate credit card is 16.28 percent according to Bankrate. The National Conference of State Legislature (NCSL) says 35 states charge interest on arrears and the rates vary from 4 to 12 percent. And, the state’s interest rates either compound monthly or annually while many credit cards compound interest daily.
While there are other potential consequences of falling behind on child support payments, many don’t take effect immediately. For example, the State Department can only deny you a new passport if you owe $2,500 or more in arrears. If you’re unable to address the underlying issue and falling that far behind on payments, using a credit card could lead to substantial high-interest debt.
When you can’t afford a payment due to a change in your income, health, or living situation you can ask the court to modify your child support order. While the court considers your petition, pay what you can even if it’s not a full payment. Some states have programs that allow you to settle arrears for less than the amount you owe, but missing payments altogether could disqualify you.
The point is this: you need to do everything in your power to meet your child support responsibility, but avoid taking on more debt at all costs. Since credit card payments bring fees and could dig you into a deeper hole, it’s probably best to avoid using them for these payments if at all possible.