American Express debt management plans.
American Express is one of the credit card issuers that is offering the Call to Action debt management plan (DMPs) to its customers. Or if a customer does not qualify for that option, then other assistance may also be provided. These new plans are being made available by companies such as AmEx industry-wide.
They offer card holders low or zero percent interest rates on their account as well as other support. The DMPs are made to people who can qualify for the assistance based on a number of conditions. But the plan being offered by American Express also helps people save from $25 to $200 per month. The savings plan is intended to help families by ensuring they have enough savings to their name to account for emergencies or other unexpected expenses.
In addition, American Express is planning on eliminating late fees and also over limit fees as part of the Call to Action Plan. Other forms of assistance may also be provided by these debt management plans. They will also lower consumers APR so that the DMPs will not have repayment terms of longer than 60 months.
Here is how the new DMPs can help you. If you owe American Express $10,000 on your credit card bills, your monthly payment to them will be about $200 in the regular Call to Action DMP and $175 in the hardship plan that is also now being offered. Those amounts will be significantly less than what a standard card holder would be responsible for paying.
Details of the American Express debt management plan (DMP)
A DMP is a program that is intended to provide people with a streamlined process as they seek assistance. The end result is that it will allow them to enter into a program to help them reduce their debt. Most of the plans try to have consumers pay off their debts within 60 months at the longest.
The credit card borrower will work closely with American Express or a credit counseling agency, and the agency will help guide you thru the process. They provide you with free advice, counseling, and also will arrange the monthly payments for you.
As mentioned above, in addition to the new American Express DMP helping borrowers get out of debt, the new plans also help them save money for a financial emergency. In the past the various types of debt management plans that were available demanded that every spare dollar a family has be applied to paying off their credit card bills. This is no longer the case. Now, these new Call to Action plans allow people to build some emergency savings to deal with unexpected crises or emergencies.
What is a hardship customer?
Under the new plans being offered, a hardship cardholder is defined as someone who has experienced a financial emergency or some other type of especially challenging circumstance. The individuals who fall into this category would owe a minimum 1.75% repayment rate on their debts. That is a very low rate. Other consumers who do not fall into that category would still have a very low monthly minimum repayment rate offered to them of 2 percent of their unpaid balance. Compare that to existing DMPs on the market, and that repayment rate can reach as high as 3 percent on those other plans. So the savings are significant.
What this means is that a hardship consumer with say $30,000 in credit card debt would face a minimum payment of just $525 per month as a result of the new call to action plan. Compare this to past programs that may have been as high as $900 per month from American Express. That is a significantly lower repayment rate, and provides the consumer substantial savings.
Other types of AmEx assistance programs
They also offer hardship programs that can help you get out of debt. While in most cases those alternative programs will lower your payments by 10 to 25 percent, in certain instances AmEx will lower your payment by up to 40% according to a spokesperson. Other assistance may also be provided as part of these DMP plans or hardship cases, such as they may also cancel or eliminate fees and late charges.
Call (800) 253-1709 to speak with a service rep to learn more about American Express debt management plans or other hardship programs.