Financial challenges can be difficult to overcome sometimes, especially when one has debts to pay off and other financial responsibilities. One such constraint may be a credit card bill that needs to be paid off by the due date to avoid penalties and maintain a credit score. Fortunately, many financial institutions offer credit card financial hardship programs to help in such situations. Being aware of such programs helps one seek much-needed support during testing times.

What are credit card financial hardship programs?
A credit card financial hardship program is an initiative to help cardholders needing temporary assistance, such as temporarily reducing interest rates, payment extensions, and late fee waivers. Sometimes, the individual’s due payment may be suspended under certain conditions. In general, if one’s credit scores and payment records have been good, there is a higher chance of being given the waivers and benefits applicable to such programs.

Who can apply for a credit card financial hardship program, and how to qualify for it?
A credit card financial hardship program is generally suitable for those currently going through a difficult financial situation and cannot afford to pay their impending credit card bill on time. Depending on the circumstances and the program’s policy offered by the specific financial institution, they may either avail of a deadline extension or even a waiver or suspension.

Following a few steps can help increase one’s chances of qualifying for a financial hardship program.

Check the company’s eligibility criteria
All credit card companies have certain fixed eligibility criteria for their financial hardship programs. So, when applying for a financial hardship program, one should know such eligibility criteria and requirements. Understanding the criteria beforehand ensures no disappointments later, and one is mentally prepared for the nature of support that the company will likely offer.

Demonstrate a financial hardship situation
Financial hardship may happen in different scenarios – loss of employment, an economic crisis, unexpected health emergencies, a natural disaster, etc. And when a solid reason substantiates a credit card holder’s request to qualify for the program, it is more likely to get approved. So, when applying for a financial hardship program, one should emphasize the financial constraint because one cannot pay off the impending debt.

Substantiate the request with documentation
Any concrete evidence of financial hardship—such as a hospital receipt or loss of employment due to factors beyond one’s control—should promptly be presented to the company. The more relevant documents one can present, the higher one’s chances of getting a waiver through a financial hardship program.

Check credit report
If a person’s credit score is poor, it is unlikely that their request will be considered. But if one had a pressing reason for payment delays earlier, one should clearly state such reasons along with any documentation, if possible. Although this step does not guarantee acceptance of one’s request, the company can approve the request if it finds these reasons genuine.

Consider the revised payment plan and agree to its terms
Suppose one’s request for a waiver on one’s credit card payment gets approved. In that case, one should check this revised payment plan carefully, promptly discuss any necessary changes to this plan with the company, and diligently agree to the revised terms to avoid any complications in the future.

Types of financial assistance through credit card financial hardship programs
As mentioned earlier, different credit card companies may offer assistance and support to their clients in different ways, depending on their terms and conditions and the client’s situation. However, some apply to almost all credit card companies offering such programs.

Temporary reductions to minimum monthly payments
If a person has applied for an EMI, their monthly installment amounts might be temporarily reduced if they are eligible for financial assistance. Such reduced EMIs can help one save a large amount every month, providing much-needed financial relief for the time being.

Reduced interest rates
Credit card companies may sometimes reduce the interest rates on credit card debts. This means that the individual would have to pay a lower amount over and above the principal debt amount, which increases the amount one has in hand.

Extensions to the payment deadline
Usually, credit card bills must be paid within a certain duration, failing which one faces a penalty and an eventual dip in credit score. However, the credit cardholder’s payment deadline may be extended if one qualifies for financial assistance through a financial hardship program. So, one has enough time to recover from the financial situation before paying the credit card bill.

Suspension of the debt
In rare instances, the credit card company may suspend the debt entirely. A company may take this step if the credit cardholder is in a deep financial crisis and is unlikely to be able to pay off the debt amount anytime soon.

Availing of a credit card financial hardship program provides one with the time and flexibility to deal with the unexpected situation that has led to financial hardship. The key to being eligible for such programs is to provide the company with a genuine reason for the waiver and concrete evidence reflecting the financial condition.