Guide to Credit Card Hardship Programs
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What Is a Credit Card Hardship Program?
What Is Involved in a Hardship Program?
Temporary reduction in your interest rate Deferred payment Waived fees A fixed payment schedule to pay off credit card debt A smaller minimum payment
Who Needs a Credit Card Hardship Program?
Applying for a Credit Card Hardship Program
Circumstances That Qualify You for a Hardship Program
A job loss A pay cut A serious illness A family emergency A divorce A natural disaster
Steps for Getting Into a Hardship Program
1. Take stock of your budget
2. Contact the card issuer
3. Only Agree to Terms You Can Afford
What to Consider Before Agreeing to a Financial Hardship Plan
Make as strong a case as you can. Gather and submit as much relevant documentation as possible about your financial situation. This might include pay stubs, bank statements, medical bills, divorce papers, or any proof of financial hardship you can provide. Make sure you understand all of the terms of the deal. Will payments automatically be debited from your bank account? Are you expected to work with a credit counselor? What would cause you to be expelled from the program? Find how the plan will affect your ability to use your credit card. It’s a good idea to find out if the issuer is planning to temporarily freeze your card so you can't use it, reduce your credit limit, or close the account.
Do Credit Card Hardship Programs Affect Your Credit?
Possible Drawbacks of a Credit Card Hardship Program
It can take some time and effort to prove your hardship to the card issuer. The issuer may require you to meet with a credit counselor or complete a debt management program. The card issuer could close your account or lower your credit limit, which could negatively impact your credit and give you less flexibility in using credit to make purchases.
Alternatives to a Credit Card Hardship Program
Balance Transfer Credit Card
Debt Consolidation Loans for Multiple Credit Cards
Debt Management Plan
Frequently Asked Questions
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