If you’re struggling to make credit card payments due to a job loss, medical emergency or other financial setback, calling your card issuer might be the last thing on your mind. But it may be one of the most useful calls you make.
Many credit card issuers offer hardship programs, which are temporary arrangements that can lower your interest rate, reduce your monthly payment or waive fees while you stabilize your finances. Here’s how they work, what to watch out for and other alternatives to consider.
Credit card hardship programs
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What’s a credit card hardship program?
A credit card hardship program is a short-term repayment arrangement offered by some issuers to customers going through genuine financial difficulty. When you enroll, your lender might reduce your monthly payments, lower your interest rate or waive fees for a set period, usually from a few months to a year.
- American Express
- Bank of America
- Chase
- Citibank
- Discover
- U.S. Bank
- Wells Fargo
Who qualifies for a hardship program?
There’s no universal eligibility standard to qualify for a hardship program. These programs are generally reserved for cardholders who face financial setbacks, which can include job loss, lowered income, medical bills, natural disaster or caregiving responsibilities.
Issuers evaluate requests case by case, and your odds improve if you can demonstrate that the hardship is temporary and that you’d be able to resume normal payments with some short-term relief.
How to enroll in a hardship program
Enrolling in a hardship program is as simple as calling the customer service number on your credit card and explaining your situation to a representative. But going in prepared will help.
Before you call:
- Know your numbers: Have a clear sense of what you can actually afford to pay each month.
- Gather documentation: You may be asked to provide pay stubs, divorce papers, medical bills, bank statements or other proof of financial difficulty.
- Know what to ask for: Make a specific request, such as a temporary APR reduction or a fixed lower payment for six months, rather than leaving it entirely open-ended.
Also, try to negotiate and make sure you understand the options the issuer offers. Get the terms in writing, including the rate, payment amount and duration. Monitor your statements to ensure the account is adjusted as promised.
What are the tradeoffs of a hardship program?
Hardship programs can offer real breathing room, but they come with a couple important caveats:
- Your account may get frozen: Your account could be frozen while you’re enrolled to restrict usage, and your participation might appear on your credit report. A frozen or closed account can raise your credit utilization rate, which accounts for roughly 30% of your credit score and can potentially ding your score in the short term.
- It’s only temporary: These programs are designed to buy you time, not eliminate your debt. If your financial difficulty is longer-term, you’ll need a broader plan.
Alternatives to consider
If a hardship program isn’t available through your issuer or doesn’t go far enough, there are other options.
Balance transfer card
A balance transfer card lets you move existing high-interest debt onto a new card that offers a 0% intro APR for a set period, which can be anywhere from 12 to 21 months. During that window, every payment you make goes directly toward your principal rather than interest, which can significantly speed up repayment. However, you’ll usually need good to excellent credit to qualify, and most cards charge a balance transfer fee of 3% to 5% of the amount moved over.
Here are some of CNBC Select’s top-ranked balance transfer cards, all offering at least a 15-month interest-free introductory period for paying off your debt:
The Citi Simplicity® Card may not earn rewards, but it can still save you money due to its amazing intro-APR offers.
- One of the longest intro-APR offers for balance transfers
- No annual fee
- No rewards
- No welcome bonus
The Wells Fargo Reflect® Card can help you save on interest charges thanks to its extra generous intro-APR offer on purchases and qualifying balance transfers.
- Best-in-class intro-APR for purchases and qualifying balance transfers
- No annual fee
- Cell phone insurance: up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible
- No rewards
- No welcome bonus
- High balance transfer fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Apply Now to take advantage of this offer and learn more about product features, terms and conditions.
- 0% intro APR for 21 months from account opening on purchases and qualifying balance transfers. 17.49%, 23.99%, or 28.24% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate, BT fee of 5%, min: $5.
- $0 annual fee.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.
- Through My Wells Fargo Deals, you can get access to personalized deals from a variety of merchants. It’s an easy way to earn cash back as an account credit when you shop, dine, or enjoy an experience simply by using an eligible Wells Fargo credit card.
Balance transfer fee
Foreign transaction fee
The Capital One Quicksilver Cash Rewards Credit Card has no annual fee, cash-back rewards and a generous intro-APR offer, which make it a great option for saving on interest while earning rewards.
- No annual fee
- Low spending requirement for the welcome bonus
- Redeem cash back for any amount at any time
- No foreign transaction fee
- 3% balance transfer fee during the first 15 months your account is open
- No bonus rewards categories
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Earn a one-time $200 cash bonus after you spend $500 on purchases within 3 months from account opening
- Earn unlimited 1.5% cash back on every purchase, every day
- $0 annual fee and no foreign transaction fees
- Earn unlimited 5% cash back on hotels, vacation rentals and rental cars booked through Capital One Travel
- No rotating categories or sign-ups needed to earn cash rewards; plus, cash back won’t expire for the life of the account and there’s no limit to how much you can earn
- 0% intro APR on purchases and balance transfers for 15 months; 18.49% – 28.49% variable APR after that; balance transfer fee applies
- Top rated mobile app
Balance transfer fee
- 3% for the first 15 months; 4% at a promotional APR that Capital One may offer you at any other time
The Chase Freedom Unlimited® is a no-annual-fee card that earns generous cash-back on everyday purchases and a lucrative welcome bonus.
- Valuable welcome bonus and high rewards rates
- Long intro APR for purchases and balance transfers
- No annual fee
- Has a foreign transaction fee
- Few rewarding ongoing benefits
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Limited Time Offer: Earn a $250 Bonus after you spend $500 on purchases in your first 3 months from account opening
- Enjoy 5% cash back on travel purchased through Chase TravelSM, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more; 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and 1.5% on all other purchases.
- No minimum to redeem for cash back. You can use points to redeem for cash through an account statement credit or an electronic deposit into an eligible Chase account located in the United States!
- Enjoy 0% Intro APR for 15 months from account opening on purchases and balance transfers, then a variable APR of 18.24% – 27.74%.
- No annual fee – You won’t have to pay an annual fee for all the great features that come with your Freedom Unlimited® card
- Keep tabs on your credit health, Chase Credit Journey helps you monitor your credit with free access to your latest score, alerts, and more.
- Member FDIC
Balance transfer fee
Intro fee of either $5 or 3% of the amount of each transfer, whichever is greater, in the first 60 days. After that, either $5 or 5% of the amount of each transfer, whichever is greater.
Foreign transaction fee
3% of each transaction in U.S. dollars
The Blue Cash Everyday® Card from American Express has no annual fee and you may be eligible for bonus rewards on a wide range of common expenditures.
- Up to $264 in streaming service and meal kit credits every year (subject to auto renewal)
- High cash-back rates in popular spending categories
- No annual fee
- The best bonus cash-back categories are capped
- Has a foreign transaction fee
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select’s editorial staff.
- Apply and find out your welcome offer. As High As $200 cash back* after you spend $2,000 in purchases on your new Card within the first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply, and if approved: 1. Find out your offer amount 2. Accept the Card with your offer 3. Spend $2,000 in 6 months 4. Receive the cash back. *Cash back is received in the form of Reward Dollars that can be redeemed for a statement credit or at Amazon.com checkout.
- No Annual Fee.
- Enjoy 0% intro APR on purchases and balance transfers for 15 months from the date of account opening. After that, your APR will be a variable APR of 19.49%-28.49%.
- Plan It®: Buy now, pay later with Plan It. Split purchases of $100 or more into equal monthly installments with a fixed fee so you don’t have the pressure of paying all at once. Simply select the purchase in your online account or the American Express® App to see your plan options. Plus, you’ll still earn rewards on purchases the way you usually do.
- Earn 3% cash back at U.S. supermarkets, 3% cash back on U.S. online retail purchases, 3% cash back at U.S. gas stations, on eligible purchases for each category on up to $6,000 per year in purchases (then 1%). Cash back is received in the form of Reward Dollars that can be redeemed as a statement credit and at Amazon.com checkout.
- Get up to a $7 monthly statement credit after using your enrolled Blue Cash Everyday® Card for a subscription purchase, including a bundle subscription purchase, at DisneyPlus.com, Hulu.com, or Stream.ESPN.com U.S. websites. Subject to auto-renewal.
- Terms Apply.
- See Rates & Fees
Balance transfer fee
Either $5 or 3% of the amount of each transfer, whichever is greater.
Foreign transaction fee
2.7% of each transaction after conversion to US dollars
Debt consolidation loan
If you’re not dealing with a massive balance, Upstart offers loans as small as $1,000 and looks beyond your credit score when evaluating your application, factoring in things like work experience and education. This is a great option if you don’t have a long credit history but are otherwise in a stable position.
Upstart Personal Loans
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Annual percentage rate (APR)
-
Loan amounts
-
Terms
-
Credit needed
300 (but may also accept applicants with no credit history)
-
Origination fee
0% to 12% of the target amount
-
Early payoff penalty
-
Late fee
5% of the last amount due or $15, whichever is greater
Pros
- Accept applicants with low or no credit
- No early payoff fees
- Most loans funded the next business day
Cons
- High late fees
- Origination fee of 0% to 10% of the target amount
- $10 fee for paper copies of loan agreement
If flexibility in repayment is your priority, Achieve lets you choose from 2-, 3-, 4- or 5-year repayment plans so you can match your monthly payment to what your budget can actually handle. Achieve also rewards borrowers who go all-in on consolidation. You can earn a rate discount if at least 85% of your loan funds go directly to creditors, with additional reductions available if you bring on a qualified co-borrower or can show proof of sufficient retirement funds.
Achieve® Personal Loans
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Annual Percentage Rate (APR)
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Loan purpose
Debt consolidation, major purchase
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Loan amounts
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Terms
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Credit needed
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Origination fee
-
Early payoff penalty
-
Late fee
Pros
- Flexible term lengths
- Rate discounts available
- Works with borrowers with fair credit
Cons
- Loans may not be available in all states
- The lender charges origination fees
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For rates and fees of the Blue Cash Everyday® Card from American Express, click here.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.