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Yes, and it is highly recommended. Lenders often prefer to avoid the costly process of repossession or foreclosure. You may be able to negotiate a loan modification, a temporary forbearance, or even a voluntary surrender agreement, which can be less damaging than a forced repossession.
Credit card statements are designed to make the minimum payment the easiest, most prominent option. This nudge exploits our inertia, encouraging a small payment that maximizes interest revenue for the lender while keeping the debtor in a long-term cycle.
You will typically be charged a late fee. After multiple missed payments, your account may be sent to collections, and the debt will be reported to credit bureaus, significantly damaging your credit history.
Ideally, do both simultaneously, even if it's a small amount. Always contribute enough to your employer's 401(k) to get the full match (it's free money). Then, allocate the rest of your available funds to your debt payoff plan. The power of compound interest in your 20s is too valuable to ignore completely.
Generally, avoid closing accounts, especially older ones, as it reduces your total available credit and can hurt your credit utilization ratio. The main exception is if the card has a high annual fee that isn't worth the cost or if you cannot control the spending temptation.