Credit card hardship programs provide help with credit card debt and bills.
Credit card companies, most of which are banks or other major lenders, offer credit card hardship programs to struggling borrowers. Each and every year millions of Americans receive some type of assistance from these plans. Find information below on how to get assistance from a credit card company. As many companies, including banks and lenders, would rather work with you so they can get some money for the bills you ow. Learn who to contact below in order to get debt relief from these hardship programs.
While the type of assistance provided will vary depending on the hardship program entered into, you may or may not be able to get a company to withhold finance charges for a year or so. Other assistance may be provided as well, such as it is possible to get a temporary reduction in the interest rate you are paying. Or get late fees or other costs waived, and some credit card hardship plans will even reduce the principal balance.
What is a credit card hardship program?
Most of the solutions are aimed at solving one off emergencies. Due to the ongoing need for assistance by borrowers, many financial institutions including credit card issuers such as Bank of America, Citibank, Discover, Chase, and Capitol One, provide credit card hardship programs. These resources have been created to help customers maintain or pay off their debt, pay their bills, and keep their credit ratings high.
While the terms and conditions can change, in general the borrower sets up a payment plan with the credit card company. After that has been done the bank will then reduce the interest rates and will even sometimes lower your monthly payment to a level you can afford to pay each and every month.
While it is not likely, it is still possible that a bank or lender will reduce your credit card balance if they see that you are heading towards a bankruptcy filing. Usually what will happen in this credit card hardship program example is that they will eventually agree to a lump-sum settlement plan with you to close out your current account. More on debt settlement.
Preparing for a plan
Remember that the main reason that banks are offering hardship programs is that they hope that you, as a consumer, will get back on a solid financial footing. After that occurs they hope that you will soon be able to return to making full payments on your account and monthly credit card bills. Like almost all businesses, credit card companies and banks are primarily concerned about making a profit.
Very few banks or credit card companies advertise hardship programs, so it is not always easy to apply for them. You can browse their website for information, but it is oftentimes not easy to find there either. Find a list below of credit card hardship programs from various credit card issuers including Citi, Bank of America, and others. More on credit card debt assistance programs.
Probably the best step to take to try to apply is to just call your credit card issuer and ask about a program that they may offer. It is suspected that some customer service representatives from various banks, such as Chase and Discover Card, are empowered to offer credit card assistance right over the phone.
In the interview process that will need to occur, you will have to tell the company about your sources of income, your expenses and other obligations. You need to be prepared and to make sure that you have all that information ready before you call in to them asking for help. You should expect that the bank and lenders will want to know about how you are going to pay off your bills and eliminate your debt, and they will also want to know when they can expect your regular monthly credit card bill payments to resume. Find some additional pros and cons of hardship programs.
The process can take time as well, and some people find it complicated. Also find other tips and steps that you help you with entering into a hardship program.
In addition, some credit card issuers may decide to lower the spending limit on your cards or they may even decide to close your credit card account altogether. Many banks also have rules that make it difficult when trying to sign up for a hardship program. Most programs are for one time events, such as a life crisis. Last, but not least, enrolling in a hardship program may very well impact your credit score and be indicated on your credit report for a period of time.
Banks and lenders with hardship programs for credit card customers
American Express: AmEx has a hardship program that is very effective at eliminating debt as it can reduce your monthly payment by as much as 40 percent. Call (800) 253-1709 to speak with a service rep. Or read more on credit card hardship programs from American Express.
Bank of America: Credit card debt relief options include eliminating fees that a customer may owe, lowering the interest rate you pay, starting you on a debt management plan, or reducing your monthly payment. Dial (800) 500-5306, or read details on the BOA credit card hardship programs.
Capital One: They offer struggling consumers negotiated payment plans, late fee and other waivers such as a reduction in your APR, and more. Learn more by calling (866) 929-5303, or continue with Capital One credit card hardship plans.
Chase: Chase will suspend future late and over limit fees, they can reduce your credit card interest rates, and even extend repayment terms. To contact JP Morgan - Chase for more information on hardship programs, call the toll free number on your card. Continue with credit card hardship programs from Chase.
Citi : Citibank offers a credit card hardship program as well. Phone (866) 936-4814. Or learn more about Citi credit card hardship program.
Discover Card : Credit cardholders who are experiencing a financial emergency or severe hardships may be able to receive a temporary single-digit APR. You can call (866) 567-1660, or find examples of Discover Card hardship programs.
Fifth Third Bank : You Have Options isthe name of the hardship program that is offered by Fifth Third Bank. More on Fifth Third Bank hardship program.
HSBC : HSBC is also pushing a hardship program to aggressively provide support to customers who are struggling with paying their credit card bills and debts. Call (888)-385-8916 for customer service. Also, find out more on the HSBC hardship program.
GE Money Bank : Hardship programs are also offered by GE Money Bank. You can contact them at 866-396-8254 to apply or get additional information on your options. Or read more on GE Money Bank credit card hardship program.
U.S. Bancorp : They will provide a number of hardship programs for people that use their credit cards. Call them at 800-715-2922 to let them know of the financial hardship that is occurring.
How do increase chances of success to get on a credit card hardship program?
Your first task before you call your card issuer is to thoroughly understand your new financial situation. You need to draw up a detailed budget to see how much you need to pay for various necessities and to understand how much you have left over for your credit card bills. You need to be able to speak knowledgeably about your financial circumstances.
Before an issuer agrees to a hardship program, they will usually ask for proof that you are experiencing difficult financial circumstances. They may require you to enroll to a debt management program, and set up automatic credit card payments each month. In addition, they may close your credit card account, or lower your credit limit.
What kind of hardships allow you to take advantage of these programs? Hardship programs accept people when they go through financial difficulties that are beyond their control. If you lose your job, have your pay cut, experience business failure, go through a divorce, experience a serious illness or suffer in a natural disaster, you can expect your card issuer to be sympathetic. In these cases and others they may put you on their hardship program.
How do I negotiate a credit card hardship program? While being allowed on a hardship program is a favor that the issuer does you, it's important to not simply accept whatever you can get. Often, issuers will simply try to satisfy you by knocking a couple of percentage points off your APR. You should be able to negotiate long enough to get a 0 percent APR for a few months. It's the only kind of arrangement that can help in most difficult circumstances.
Try to get your interest rate lowered, as this usually has a major impact and many card companies may offer this option. Be sure to emphasize your previously strong payment history, credit score, and past relationship. It is usually not best to tell them you lost your job since in effect you are telling them that you have no capacity to pay your bills. Instead you need to focus your negotiations on how much you can afford to pay each month. Find more negotiation tips for getting out of debt.
Do credit card hardship letters work? A letter more than likely will not be enough to resolve any credit card debt problems you may have, but they are good tools to start the negotiation process. So their is no downside to creating one. Find a few examples of credit card hardship letters.