Credit Card Debt can be a serious headache for anyone, and if you’re experiencing the same, then we encourage you to go through this article. We’ve collaborated very helpful information on how to manage and even write off your debt as well as disclosure on such little known facilities as credit card hardship program. It’s the credit-card issuers’ least publicised option. Without further ado, let’s get straight to it.
What is a Credit Card Debt Program?
Credit Card Hardship Program mustn’t be confused with any of the various well known debt management plans offered through non-profit credit counseling agencies. Credit card issuers themselves offer these hardship programs internally. This Credit Card Hardship Program include the ability to lower the interest rate, lower the minimum payment or reduce fees and penalties. These can be short-term, lasting six months to a year, or permanent, until the card balance is totally paid off.
If you own a credit-card, you’ll most likely have a hardship program. All creditors have them and they’re there for a reason because let’s face it financial hardships strike almost everyone at some point of time in their lives. Most credit card holders aren’t’ aware of it because credit card issuers don’t like to advertise about them a lot.
What it entails to apply for a Hardship Program?
There’s usually a number mentioned on the credit statement. It may not be clearly discernible, but you could get a hint from lines such as ‘if you anticipate problems paying your balance, call this number.’ The same number could take directly to the hardship department or probably, a customer service department that screens your call. The customer service agent might try to dissuade you by saying that they don’t have a hardship program. That doesn’t mean the end of the world. Try calling back at another time. Hardship departments go by a variety of monikers, so if you any service support number, your aim should be to reach the agent who has the leverage to offer a hardship program.
You want to be clear-cut in your converse, and let them know that you’re having difficulty and would like to talk to someone about customer assistance. You may want to keep the information relating to your income and expenses handy. Some agents might try to take the call themselves, but if you find they’re not able to help you, you can bluntly say thank you, you’d like to talk to someone specialized in hardship program or a certified credit specialist.
When you’re finally connected to the concerned department or the right personnel, you’d want keep the conversation polite and candid, explain them the problem you’re facing. You would benefit from assuming responsibility by expressing your capacity to repay the balance and your current financial position. Let them know how much you can afford at best. The service agent at this point might brief you about several relief-programs they have in place, but if they don’t fit your criteria, keep negotiating.
Some Card-issuers are hesitant to consider you for hardship if you’re current on your bills, while other may offer better deals even if you’re current.
Consequences
The credit card act of 2009 limits the circumstances under which a card issuer can raise your APR, but it doesn’t totally prevent them from doing so.
Issuers just don’t cut your credit limits because you’re asking them about the hardship programs. That practice would discourage people from calling them. It’s best, at first, to use caution – merely inquire! Doing that won’t trigger an action, but if you go a step further and indicate in any way that you might be having difficulty paying your debt, which is very likely to happen in such conversations, you would risk losing the ability to use your accounts.
However, if you do apply for a hardship program, your charging privileges are suspended temporarily or permanently. Your card may also be reinstated with a different credit limit after you opt for a hardship program. An important question you must ask : What will happen to my credit card if I successfully complete the program?
Another point of principal importance is how the hardship program impacts your credit score. “As with anything FICO-score related, it depends on how it appears on the credit report,” says Barry Paperno, consumer operations manager for FICO. So try to determine how the issuer will report your agreement to the credit bureaus. Some agents may be able to give you this information, while others might be completely oblivious to such information.
Verdict!
So should you go for the hardship program? Well if you feel it’s the only viable option for getting out of credit card debt and you’re prepared to risk the reputation of your credit score, then definitely you have to consider it and discuss the details with your credit card issuer.
That’s pretty much all about the Credit Card Hardship Programs. Now we’ll be looking at some of the other beneficial tips to help you pay off your debts in an effective way.
Related Posts:
Which Are The Best Ways To Consolidate Your Student Loan Debt?
Private & Federal Student Loan Debt Consolidation and Settlement
Credit Card Debt Negotiation – An Expert Guide
What is Credit Counseling and How It Can Help You Reduce Debt Problems?
How To Consolidate Credit Card Debt? 11 Debt Consolidation Tips
Credit Card Hardship Program : Alternative for Debtors
Pros and Cons of Your Debt Consolidation Options
The post Credit Card Hardship Program : Little known Alternative for Debtors appeared first on VantageAcceptance.