Credit card companies are known to charge numerous types of fees and penalties to delinquent consumers. However in certain times of hardship, cardholders can ask for credit card forbearance to help deal with the debt.
Sometimes banks will actually work with customers in exceptionally difficult circumstances to modify their credit card debt repayment schedules to something they can handle. The relief they’re offering is forbearance, which is not to be confused with credit card debt forgiveness.
When is Credit Card Forbearance Necessary?
Credit card forbearance is the substantial lowering of a credit card rate, or the suspension of payments for six months. Typically, customers who suffer a layoff or unemployment can ask for forbearance. Fees could also be eliminated during this period of time. The reason is because banks are willing to work with you to make sure you can eventually pay off the debt. Forbearance is not debt forgiveness.
Consumers Need to Be Proactive in Seeking Help
Critical to effective forbearance negotiations are a consumer’s proactive steps. If you are laid off, it is your responsibility to call the credit card company as soon as possible. You have more options to work with in your forbearance discussions with the credit card company the sooner you approach them, and even more so because you called before the payment problem had arisen. Letting someone know there’s a potential problem on the horizon is a smart move, as opposed to letting things go too long before seeking help.
If your credit card offers these financial assistance options, take advantage of them if you need to but be sure to seek help before you ever miss your first payment. Of course, having credit cards with good rates can be useful, but you have to manage your debt wisely.
Do you have a large amount of credit card debt, and are afraid of falling behind? Have you tried contacting creditors to help with your situation?
Photo Credit: Andres Rueda
Occupy Credit Card interest rates!
My sister in law tried this, and it did work. She was late on one payment and was charged an outrageous 18%! She called and said she was going to continue being behind due to her and her husband losing their jobs, and the credit card company was willing to lower her interest rate. She did have a good credit and payment history as the article mentioned.