How easy or difficult is it to enter into a credit card hardship program?

Many credit card companies will do their best to not discuss a hardship program until a payment is missed. However, if someone misses a payment they will usually have their interest rate increase to over 20%. So this causes a dilemma as it is generally not a good idea to miss any type of payment. What if some calls their bank, asks for help, and they still can’t get into a hardship program? What steps can someone take and how can they get relief.

When speaking to an expert, almost all will strongly advise consumers to call their creditors and/or banks as early as possible, at the first sign of trouble. However, when people do this they are sometimes told there is nothing that can be done, and will often be told to call again after they have missed a monthly payment. What makes this challenging is that most people are trying their best not to miss a payment, so this is really a Catch-22.

If you take a step back and look at the situation from that of the bank or credit card company, unfortunately it will seem like this makes sense. Everyone will always want a lower interest rate on their credit cards, and in addition most people would like lower minimum monthly payments, fees waived, and other help. Most consumers would love to have their total unpaid debts reduced as well. So banks can’t offer hardship programs to just anyone who asks, as then the bank would be out of business.

So this makes sense. Lenders know that if they were to allow anyone who calls them and asks for assistance into a credit card hardship program, then these assistance programs would be widely abused. But the fact is that many people truly do need assistance in these challenging economic times, so many banks have made the decision that in order to prevent abuse of the programs, they require a cardholder to have missed a payment or two in order to be eligible for a hardship program. They are trying to offer assistance to only those customers who are truly unable to make their minimum payments and need assistance.





So a bank thinks that if you've been making your regular scheduled monthly payments, regardless of how difficult it may be for you to pay on time or regardless of what other bills you may have had to put off paying, then from the bank's perspective you can afford the payments as you are making them.

Therefore by missing payments most issuers would likely make the customer eligible for the hardship program. But on the other hand, if someone continues to make the monthly payments on their credit card bills because they are worried about the interest rate increasing on their account, then the bank would say that they can afford to continue to make the payments and that they are not really in need of any assistance.

Hardship programs were not created to help ease the burden on a credit card holder who can make payments, even if making them is difficult. After all, these various hardship programs were created for those customers who really cannot afford their payments, regardless of what may happen if they miss one. While this may sound extreme, most credit card companies do not want to make entering into a hardship program a painless process as then everyone would do it.

How you can get into a credit card hardship program

A credit card hardship program is a payment plan that you work out with your lender or bank that is also your credit card issuer. While they are not always easy to get, when your bank offers you a hardship payment plan, they typically lower their interest rate and waive any fees that make it harder for you to pay what you owe. These programs usually run for three months or longer.





Based upon above, it can sometimes be challenging. A couple options to consumers are therefore  missing the payment on your account as indicated above. However, as noted, this can sometimes present other challenges, namely an increase in your interest rates.

So maybe the best ways to get some relief is to either use a non-profit credit counseling agency, or call the lender yourself and negotiate. You will need to be persistent and be willing to provide proof of your hardship. You can call the issuers, negotiate, provide detailed financial information, and try to agree to terms. Learn more on this credit card debt assistance option as well as other assistance programs and find steps to follow.

So while there may be cases in which you need to miss a payment in order to get into a credit card hardship program, sometimes a good old phone call and negotiation may do the trick as well.

By Jon McNamara

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