February 6, 2009 - 2:03pm
Financial uncertainty has become a fact of our present-day life. However, there is always a way out. If you can’t pay off your debt due to job loss, unpaid family leave or medical emergencies, you should contact your bank before the situation becomes acute. Missed credit card payments will ruin your credit score and cause additional charges. Many banks’ customer service departments offer assistance to people who are experiencing financial hardship. They are granting some kind of "forbearance" designed to help card holders maintain finances during difficult life events.
Forbearance programs are beneficial for both sides. Customers won’t face defaults and ruin their credit score. Banks will be able to get their money back. If a customer declares bankruptcy, the credit company won't get paid at all. That’s why lenders have a profound interest in keeping you out of bankruptcy.
The choice of forbearance program depends on your particular financial situation and ability to meet restructured terms. Sometimes you may be able to delay payments for 6-12 months or even longer. In other cases banks reduce your minimum monthly payment or ongoing APR. Some credit companies eliminate late payment fees.
Keep in mind that forbearance doesn’t stand for forgiveness. Banks are commercial organizations, not charity ones. They need to make profit and fulfill their own financial obligations. Forbearance programs can offer you a temporary reprieve, but you still must pay off your debt in full. Also, remember that you can accumulate interest during an extended payment period.
Let’s have a look at the peculiarities of forbearance programs from several banks. If you have a credit card from Chase, you can have an opportunity to restructure your debt by lowering interest rates, eliminating some fees and extending repayment terms. So if you have financial problems, contact Chase customer service department before you fall behind on payments.
Citi has already accepted about 350,000 card holders into its forbearance programs during the last quarter of 2008. The customers can ask for debt consolidation or adjustment of terms. It will help to reduce or restructure your credit card balance. There are also programs designed to help customers who make regular timely payments but are beginning to need help.
Bank of America also tries to help card holders as early as it is possible. It encourages customers contact their service departments before the situation becomes too difficult. You can rely on similar assistance - reduction of APR or prolongation of terms. The bank has already modified over 850,000 credit card accounts.
Discover is making calls to card holders who may become delinquent and also assisting people who come directly for help. Assistance varies from personal payment solutions to a serious reduction of APR.
Late credit card payments are hitting record highs. In December, the amount of credit card debt delinquent over 60 days made up 3.75%. The previous high of 3.73% was set in February, 1997. Slowing economic activity, collapse of the subprime mortgage market, job losses, raising gasoline and food prices have strained the budgets of many Americans. If you can’t afford to pay your credit card bills on time, lenders are ready to help you. Of course, the level of assistance will vary depending on your particular financial situation and the willingness to eliminate your debt.
It's not a surprise that nowadays many customers can’t make timely credit card payments. The current high level of delinquencies is a consequence of the latest financial crisis. Being short of cash and having few other alternatives to choose, many Americans have turned to credit cards to cover raising living expenses. As the economy is going on faltering, more and more borrowers become unable to pay off their heavy debts. Citi bank reports that its loss rate for North American cards has increased from 5.5 % to 8% during the fourth quarter of 2008.
It's not a surprise that nowadays many customers can’t make timely credit card payments. The current high level of delinquencies is a consequence of the latest financial crisis. Being short of cash and having few other alternatives to choose, many Americans have turned to credit cards to cover raising living expenses. As the economy is going on faltering, more and more borrowers become unable to pay off their heavy debts. Citi bank reports that its loss rate for North American cards has increased from 5.5 % to 8% during the fourth quarter of 2008.
Financial uncertainty has become a fact of our present-day life. However, there is always a way out. If you can’t pay off your debt due to job loss, unpaid family leave or medical emergencies, you should contact your bank before the situation becomes acute. Missed credit card payments will ruin your credit score and cause additional charges. Many banks’ customer service departments offer assistance to people who are experiencing financial hardship. They are granting some kind of "forbearance" designed to help card holders maintain finances during difficult life events.
Forbearance programs are beneficial for both sides. Customers won’t face defaults and ruin their credit score. Banks will be able to get their money back. If a customer declares bankruptcy, the credit company won't get paid at all. That’s why lenders have a profound interest in keeping you out of bankruptcy.
The choice of forbearance program depends on your particular financial situation and ability to meet restructured terms. Sometimes you may be able to delay payments for 6-12 months or even longer. In other cases banks reduce your minimum monthly payment or ongoing APR. Some credit companies eliminate late payment fees.
Keep in mind that forbearance doesn’t stand for forgiveness. Banks are commercial organizations, not charity ones. They need to make profit and fulfill their own financial obligations. Forbearance programs can offer you a temporary reprieve, but you still must pay off your debt in full. Also, remember that you can accumulate interest during an extended payment period.
Let’s have a look at the peculiarities of forbearance programs from several banks. If you have a credit card from Chase, you can have an opportunity to restructure your debt by lowering interest rates, eliminating some fees and extending repayment terms. So if you have financial problems, contact Chase customer service department before you fall behind on payments.
Citi has already accepted about 350,000 card holders into its forbearance programs during the last quarter of 2008. The customers can ask for debt consolidation or adjustment of terms. It will help to reduce or restructure your credit card balance. There are also programs designed to help customers who make regular timely payments but are beginning to need help.
Bank of America also tries to help card holders as early as it is possible. It encourages customers contact their service departments before the situation becomes too difficult. You can rely on similar assistance - reduction of APR or prolongation of terms. The bank has already modified over 850,000 credit card accounts.
Discover is making calls to card holders who may become delinquent and also assisting people who come directly for help. Assistance varies from personal payment solutions to a serious reduction of APR.