Get help with credit card debts.
Millions of Americans need help with paying their credit card bills as a result of either overspending or challenging financial circumstances. They are struggling each and every month with paying down their debts (even with making the minimum payments) and keeping up with paying their everyday bills. Families that need help with their credit cards do have several resources available to them.
Assistance is available in many forms as listed below. The good news is that banks and other credit card issuers are more willing than ever to provide help with paying down the balance on a credit card. There are also various counseling programs available, many of which are provided for free to borrowers. While the exact numbers change year in and year out, in general around their million customers received some type of assistance from their lender. There may be modifications put into place, hardship plans, interest rate reductions and much more.
The companies as well as local or national banks that offer support are doing several things. The exact type of credit card help provided to each borrower will vary based on their needs and financial circumstances. Lenders are, among other things, reducing customer’s interest rates, waiving fees or some of the principal balance, lowering monthly payments, and helping in other ways. More programs are being offered to help consumers with their credit cards than ever before. The goal is to find a solution for the customer and the lender.
These companies have decided that they would rather work with the customer as it is in their best interest to do so as well. The lender would rather get some payments from the customer than see the individual file for bankruptcy, in which that case the debt would not be repaid. As if that were to happen then the banks and credit card companies would receive no financial return on their investment, so lenders often offer credit card debt help to borrowers.
Listed below are resources, information, and services offered by various companies. One or more of these can provide a household with credit card help during difficult times. Some of the programs offered include the following.
- Debt management plans involve working with a credit counseling agency that is selected by your bank.
- Hardship programs is a term used to describe a number of approaches. It can include interest rate reductions, settlement, payment plans, and other tactics.
- Debt settlement is eliminating a portion of your total outstanding balance on the credit card.
- Forbearance includes a temporary suspension of your monthly payments.
- Do It Yourself (DIY) is a concept that includes many approaches, and each can offer credit card debt help to the family.
As noted, many people do receive credit card help every single year. Read real life examples on how banks and lenders are providing assistance to customers. So there are in fact many people that are receiving help from interest rate reductions on their credit cards. Other families are entering into settlement plans, getting help in the form of payment extensions, and more.
Credit card hardship programs
The primary goal of a credit card hardship program is to help borrowers restructure their debt and avoid a default or bankruptcy filing. As part of this approach, an agreement is made between the consumer and the credit card company. This will result in a a regularly scheduled payment plan. In addition the creditor will often times reduce the interest rate, adjust the minimum payments, waive fees or charges, or provide other types of credit card assistance to the customer.
While every bank and lender has its own criteria for entering into a credit card hardship program, there are some tips as well as steps to follow that can help. Find how to enter into a credit card hardship program, and read more on the steps to follow.
Debt management plans (DMP) help with credit cards
These plans are offered by banks, lenders and credit card companies. They will have the customer work with dedicated credit counseling agencies to improve their overall financial condition. The program can also help the borrower improve their credit scores if it is currently poor. In return the individual will receive a lower interest rate. Some lenders may also offer additional types of credit card help as part of the DMP. Get more details on debt management plans.
Help with credit cards from debt settlement
This is when a credit card company will agree to reduce or eliminate a portion of the outstanding debt that the customer will currently owe them. It is a reduction in the principal balance due on the account, and this may be one of the most effective forms of credit card help. The corporation will negotiate a settlement with the applicant. The lender will do this so that they can get some money from the individual rather than see them default or go bankrupt.
There are multiple approaches to take in order to get credit card help as part of a settlement. Some people decide to try to settle on their own and others will decide to use a company that specializes in offering this service. Find other ways how debt settlement programs can help. Or for more information on the pros and cons of this approach, compare debt settlement vs. consolidation.
Credit card forbearance programs
This is a solution in which a credit card company will allow their customer to stop paying their monthly credit card bills for a short, defined period of time. When this occurs, this is known as forbearance. The length of time can be from anywhere from a few months up to a year. The forbearance can be provided due to a job loss, medical emergency, or maybe the death or divorce of a primary wage earner in the home.
Once the approach has been agreed to, the bank may adjust the interest rate during this timeframe as well, and possibly even stop accruing the interest expense on the household’s account. There is nothing like a break in the monthly payments from a forbearance program as a way to get credit card help. Find more information on credit card forbearance programs.
This a loan product that is offered by many types of lenders. This type of credit card assistance program can be put into place by banks, private companies and even directly by credit card companies. While this may not always be the best approach to take as the customer will still owe the entire balance on their account, it can work in certain cases.
The loan they provide the client with will them to pay off all of their current credit card debts. Not only does it do that, but the family can also save money each and every month. This is the case as the debt consolidation loan will be at a lower interest rate then what they currently have in place. When will therefore save the borrower money on their future interest expense and allow them to get out of debt faster. Note that if the rate on the new loan is not lower, then the person should not explore this option. Learn more on debt consolidation loans.
While unfortunately it is not as well known, or taken advantage of by consumers, people can refinance their car loans. Any savings on this can be used to help pay their credit card bills. It is easy to do and can lead to a quick return on their investment. It could in effect potentially save the borrower thousands of dollars over the life of their car loan.
It is often free to do as well; both apply and to get quote. Many lenders will not charge a fee to apply for their auto loan refinancing products. The monthly savings experienced to those who do this can then be used as a form of credit card assistance, as the money can be reallocated to pay off those balances. Read more on car loan refinancing, including which banks and lenders offer the product.
Other important steps to take for credit card help
The information above will direct people to more details on ways to get credit card help from various banks and other issuers. However, there are several other steps borrower can take to get assistance. Some are DIY type approaches, but there are also other resources to use. Some of the key highlights as well as assistance programs to explore are below.
Credit counseling agencies - They will provide consumers with financial counseling, negotiate with your creditors, etc. Many of the companies are non-profits so the fees they charge may be reduced. Some low income individuals may even receive free counseling. Read more on free credit counseling from non-profits.
Negotiate your bills and debts - Anytime that a person is dealing with a credit card company or bank, they will need to negotiate. This is a fact of life. Learn negotiating tips that can help you get out of debt, or find help negotiating credit card debts.
Write a credit card hardship letter - If someone were to send their bank or credit card issuer a hardship letter, this will begin the settlement process. It it can lead to other solutions or credit card help type programs. In rare cases the lender may even settle just on the basis of the offer itself. Find examples of credit card hardship letters.
Another up and coming solution to credit card problems is using the service of an attorney. Many consumers prefer this option over using a debt settlement firm as the service provided is often higher quality. An attorney may be able to negotiate your credit card bills, mediate a solution, or enter in an arbitration plan. Paralegals may also provide this service as well. Read more on attorneys that settle debts.
While the programs referenced above may provide consumers with help on their credit cards, the most important thing to do is to keep trying. Use multiple approaches. Contact creditors, counselors, banks, and other companies to see what services they can offer that can help. Inquire with their customer support teams to learn how they can assist. Be aggressive in reaching for the final goal of getting out of credit card debt.