What is a credit card hardship program?

Struggling credit card users may be able to get relief by calling their credit card company. (iStock)

Credit cards can be an important way to cover expenses when your budget is tight. During the coronavirus pandemic, millions of workers have lost their jobs, making it challenging to avoid credit card debt. 

As a whole, credit card debt has decreased during the pandemic due to lower spending overall, from $1.09 trillion in the fourth quarter of 2019 to $992.4 billion in the second quarter of 2020, according to the Federal Reserve

But for people who are struggling to get by, it can still be challenging keeping up with even minimum credit card payments. Fortunately, credit card companies can provide some help through credit card hardship programs. Here’s what you need to know.

What is a credit card hardship program?

Credit card hardship programs can vary from issuer to issuer. But in general, they provide some form of relief to customers who can’t make their payments. 

Options may include:

A modified payment program to reduce the financial burden.

Forbearance programs, which can pause your monthly payments for a period.

Fee waivers to reduce the costs associated with your account.

Lower interest rates to reduce your monthly payment and interest charges.

It’s in the best interest of banks and credit unions to offer credit card hardship programs because providing some relief and receiving less money is better for them than not receiving anything at all, which can happen if you default on your debt

Under the Coronavirus Aid, Relief and Economic Security (CARES) Act, a federal COVID-19 stimulus package, lenders are required to report your accounts as current in certain situations, even if you can’t make payments right now.


How do I qualify for a credit card hardship program? 

Each credit card has its own criteria for determining who qualifies and the types of relief they can get from the program. 

Examples of situations that can qualify you include:


Reduced wages

Natural disasters

Divorce or other financial emergencies

Expect to provide some information about your situation, such as your employment status, income and expenses and more. If you’ve been a customer for several years and have always paid on time, this can help improve your chances of getting the relief you need.

How do I enroll in a credit card hardship program? 

Call your credit card issuer to determine whether you qualify for a credit card hardship program and enroll in the program. The representative can walk you through the process and provide you with all the information you need to know. 

Make sure you understand the terms and conditions of the program and agree only if you can afford what the credit card issuer is offering you. If you can’t afford the hardship program, you may need to consider other options. 

And remember, you may need to provide some documentation to prove that you’re in need of relief.

What are some other options?

Depending on your circumstances, you may have other options that can help you get the relief you need. Examples include:

Consolidation loan: A personal loan may be able to help you consolidate your credit card debt at a lower interest rate, which can save you money. Just keep in mind that the monthly payment on the loan may be higher than your combined minimum payments on your credit cards. If you’re considering a debt consolidation loan, visit an online marketplace like Credible to compare personal loan options.

Balance transfer credit card: Balance transfer cards offer 0% APR promotions, which can help you save money as you pay down your credit card balance. You’ll typically pay zero interest for the first year or longer. Many of these cards charge an upfront balance transfer fee of 3 to 5 percent, but it can be worth it for the interest savings. Visit Credible to see what balance transfer credit card options make sense for you.

Credit counseling: Credit counseling agencies can help you by creating a debt management plan for your credit cards. Credit counselors may be able to negotiate lower interest rates and payments on your behalf. You’ll make your payment to the agency, and it will pay your creditors directly. A debt management plan could help you save money in the long run, but they typically come with modest fees for the service.


Pros and cons of a credit card hardship program

Credit card hardship programs aren’t for everyone, but they can be beneficial for many. Before you ask for relief, make sure you understand both the benefits and drawbacks:


It can help preserve or boost your credit score and credit history by avoiding late payments and default.

It can make room in your budget for other important expenses.

It can provide some peace of mind.


Providing documentation may be difficult in some cases.

Your card issuer may freeze or even close your account.

You may not get the relief you need.

If you’re struggling financially, the sooner you start exploring your options, the better.