What Are Credit Card Hardship Programs?

You’re trying to keep up with your bills, even though you recently lost your job, and your spouse has been hit with a serious illness. And because you’re using whatever cash you do have for day-to-day expenses, you’re struggling to make your minimum credit card payments. This may be the time to ask your credit card issuer for a hardship arrangement.  

A credit card hardship program is a payment plan where your issuer agrees to accept a lower payment, waive fees or decrease your annual percentage rate (APR) to give you breathing room as you get your finances back on track. This guide will let you know what these programs include, who can qualify and what questions you need to ask to determine whether it’s the right fit for you.  

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Key Takeaways

• What a credit card hardship program is: A temporary payment plan you negotiate with your issuer when a genuine setback — like a job loss, illness or divorce — makes it hard to pay, where the issuer may lower your APR, reduce payments or waive fees.

• You have to ask — these programs aren't advertised: Call the number on the back of your card and specifically request hardship assistance, sometimes called forbearance, since issuers don't promote it.

• Approval is case by case, and proof is usually required: Expect to document your hardship with a termination letter, medical bills or bank statements, and know that no law requires an issuer to offer a program.

• It's relief, not forgiveness: Programs typically run for a few months to a year and temporarily change your terms, but you still owe the full balance.

• It can still affect your credit: If the issuer closes rather than freezes your account, your available credit drops and utilization can rise — so ask what the issuer will report to the bureaus before you enroll.

• Get the terms in writing, and weigh alternatives: Confirm the new agreement in writing, and if a hardship program isn't the right fit, compare a balance transfer card, debt consolidation loan, credit counseling or a debt management plan.

Summary generated by AI, verified by MoneyLion editors

What Is a Credit Card Hardship Program? 

A credit card hardship program is a temporary payment plan that you negotiate with your credit card issuer when a genuine dire financial situation — such as a medical illness, job loss or divorce — hinders your ability to make payments. The issuer may agree to lower your APR and monthly payments, as well as offer credit card fee waivers, deferred payments or another payment accommodation.  

These hardship programs vary by lender and aren’t advertised. You’ll have to specifically ask your lender if a hardship program, sometimes referred to as forbearance or an assistance program, is an option. Keep in mind that hardship programs will change the terms of what you owe but will not erase your credit card debt — they're short-term plans designed to help you get back on your feet.   

How Credit Card Hardship Programs Work 

When you call your credit card issuer, you should first ask whether they offer a hardship program. Typically, if it's available, you’ll be asked to explain your hardship and request assistance.  

Depending on your hardship reason, it’s normal for the credit card issuer to require proof in the form of a termination letter, medical bills, bank statements and any other supporting documents they may deem necessary.  

If the credit card issuer is satisfied with your financial hardship proof, they’ll outline the terms of your “new” payment agreement. You could get a lower APR, fee waivers or reduced payments. Keep in mind this agreement is meant to be temporary; terms may last a few months to a year. While following this arrangement, you’ll presumably get on track with your payments and have a chance to stabilize your finances.  

Who May Qualify for a Hardship Program 

Anyone who’s finding it difficult to pay their credit card bills may qualify for a credit card hardship program. Generally, who qualifies is decided on a case-by-case basis. You may qualify if your hardship is temporary, and you’re able to improve your situation within six to 12 months.  

Here are common qualifying situations:  

• Job loss 

• Pay cut 

• Medical emergency 

• Serious illness 

• Divorce 

• Natural disaster 

• Caregiving responsibilities 

• Family emergency  

Lenders may evaluate applicants for their credit card hardship programs based on the following factors:   

1. Your account’s status prior to your hardship. If you have a history of consistent, on-time payments, this will work in your favor.  

2. The amount of time you’ve been a cardholder. A creditor may consider the length of time you’ve been a customer.  

3. Your ability to make payments. The creditor needs to see that reduced payments are still within reach. 

4. Your account’s current status. Some creditors will extend a hardship program before you miss a payment; others may wait until after you miss a payment.  

How To Apply for a Credit Card Hardship Program 

The good news is that it’s pretty easy to apply for a credit card hardship program. First, flip your credit card over and dial the number on the back. When you talk to the customer service representative, you'll need to be prepared to discuss the following:  

• Review your finances. Understand what you can afford to pay.  

• Explain your hardship clearly. Gather documents that will support your hardship circumstance. If necessary, prepare a script in advance to prevent you from getting flustered.  

• Be clear about your request. Before agreeing to any terms, be clear on what you want. Do you want a lower APR and lower monthly payments? Would you like a fee waiver? Have a clear idea of what you’re trying to negotiate.  

• Submit any documentation that’s requested. Have a copy of a termination letter, medical bills and bank statements on hand in case you need to provide proof after the call.  

• Get final terms in writing. If the credit card issuer agrees to the new terms, ask for the new agreement in writing. 

What a Credit Card Hardship Program May Offer 

There’s no “one-size-fits-all” hardship program. You have to ask specifically about the available options. Credit card issuers may offer different ways to tackle your hardship:  

• A reduced interest rate 

• Waiver of late fees or other fees 

• Lower monthly payments 

• Paused payments for a limited period 

• Structured installment plan  

• Modified repayment setup  

• Temporary account freeze 

• Stopped collection calls  

Pros and Cons of a Credit Card Hardship Program 

Curious about the pros and cons of credit hardship programs? Evaluate whether the advantages outweigh the disadvantages:  

Pros 

• You avoid third-party fees. You work directly with the creditor to resolve your debt.  

• Reduced APR. Creditors will often reduce the interest rate during the program’s duration.  

• No new loan required. You won’t be required to get a new loan, and there won’t be a hard inquiry on your credit or the push to leverage collateral.   

• Helps to stabilize finances. A hardship program offers temporary relief to help you reset your finances and budget.  

Cons 

• You’ll need to make a permanent change to your spending habits. A credit hardship program is temporary relief, and you must address the underlying spending problem.  

• Limited debt reduction. You are still responsible for paying the full amount since the program may ease the terms, but not reduce the balance.  

• Credit usage is limited. With the hardship program, creditors may freeze your account or severely reduce credit limits.  

• Must comply with strict restrictions. Some hardship programs require automatic withdrawals, credit counseling or strict compliance with terms.  

How a Hardship Program Could Affect Your Credit 

Making a reduced payment or a payment with a lower APR is better than missing credit card payments. Asking for a hardship arrangement is a better solution than ignoring your payments.  In many cases, a hardship arrangement is better than a debt management plan or debt relief.  

However, that doesn’t mean a hardship arrangement can’t impact your credit. There are a few ways that your credit score could dip:  

• The credit card issuer may close the account instead of freezing it. This reduces the amount of available credit and could raise your credit utilization.  

• Some credit card lenders may perform a hard inquiry on your credit before extending the hardship program.  

You should do your due diligence and ask the credit card issuer what they plan to report to the credit bureaus. You’re also entitled to one free credit report every 12 months from each of the bureaus. Make sure you double-check these reports for any errors.  

Alternatives to a Credit Card Hardship Program 

Sometimes a hardship program isn’t the best fit, and you may want to consider another credit card debt management strategy. Here’s a comparison table to help you decide:  

Questions To Ask Before You Enroll 

If you're unsure about the hardship arrangement, don’t hesitate to ask questions. Here are some questions you should ask before you enroll:  

• What’s the length of the program, and can it be extended if needed? 

• What reduced payment amount can I expect during the program? 

• Will interest continue to accrue on my balance, and if so, at what rate? 

• Will my card be suspended or permanently closed while I'm enrolled? 

• How will my account be reported to the credit bureaus during the program? 

• Once the program ends, what are the terms and next steps for my account? 

Bottom Line 

If you’re struggling to make your credit card payments because of a temporary hardship like a job loss, medical bills or student loans, you may want to inquire about a credit card hardship program. These programs aren’t always advertised, but credit card issuers may have the ability to lower your APR or monthly payments, waive late fees or offer other ways to reduce your debt burden. This isn’t a way to “erase” your debt, but to help you regain financial stability. If you’re having trouble making payments, act today and you may avoid future financial headaches. 

Credit Card Hardship Program FAQs 

What are credit card hardship programs? 

Credit card hardship programs are when the credit card issuer offers a payment plan to a borrower who has a financial hardship like a medical illness, job loss or divorce. The debt is not erased, but instead the borrower may owe a lower monthly payment, a reduced APR or get a fee waiver.  

Who qualifies for a credit card hardship program? 

Anyone can qualify for a credit card hardship program as long as it’s an eligible hardship situation. These include medical illness, job loss, natural disaster, family emergency or caregiving responsibilities.  

Do credit card hardship programs hurt your credit?  

There’s a possibility your credit score may take a hit with a hardship program, but it’s better to resume payments than miss them. If the credit card issuer closes your account, it could increase your credit utilization rate, which can affect your credit score.  

Do all credit card issuers offer hardship programs? 

It’s common for credit card issuers to offer hardship programs, but they aren’t necessarily advertised. Credit card issuers aren’t required by law to provide this program; it depends on the lender.  

What if I miss a payment during the hardship arrangement?  

The agreement will likely terminate, returning your account to the original terms.  

Key Terms

• Credit card hardship program: A temporary, negotiated payment plan in which your issuer may lower your APR, reduce monthly payments or waive fees during a genuine financial hardship. It doesn't erase your debt.

• Forbearance: The broader term for a temporary modification to your payment terms. A hardship program is a specific, structured form of forbearance.

• Annual percentage rate (APR): The yearly cost of borrowing on your card. A reduced APR is one of the most common forms of hardship relief, lasting only for the duration of the program.

• Credit utilization: The share of your available credit you're using. If an issuer closes your account during a hardship program, your available credit drops and your utilization can rise.

• Hard inquiry: A credit check that can temporarily lower your score. A hardship program usually doesn't require a new loan, but some issuers may run a hard inquiry before extending one.

• Account freeze: A temporary hold that restricts use of your card during the program, as opposed to a permanent closure.

• Debt management plan: A structured repayment plan set up through a nonprofit credit counseling agency that negotiates better rates with creditors — one alternative to a hardship program.

• Balance transfer card: A card that lets you move balances to a 0% APR promotional rate, typically 12 to 21 months — an alternative for those with a good credit score.

Sources

• CFPB: Need help with your credit card debt? Start with your credit card company! 

• CFPB: Act fast if you can't pay your credit cards 

• FTC: Free Credit Reports 

• CFPB: What is the difference between credit counseling and debt settlement, debt consolidation or credit repair? 

Summary generated by AI, verified by MoneyLion editors

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