With a lot of Americans facing layoffs or fewer hours at work, credit card issuers are gearing up for questions from people who are unable to pay their bills.
In this article, we’ll take a look at what you need to do if you find yourself in the situation where you can’t pay yours.
Credit card issuers have a variety of tools at their disposal to help during times of widespread crisis. Some of the common techniques they use to work with borrowers include:
- Pushing your payment deadline out to a later date
- Lowering the annual percentage rate (APR) on your card
- Waiving late fees
- Allowing you to skip a payment
However, each issuer has its own way of offering assistance — and what’s available may vary by customer.
For example, Bank of America customers can request to defer payments and ask for refunds on late fees. "There will be no negative credit bureau reporting for up-to-date clients," according to a Bank of America press release.
BOA customers who need this assistance are urged to call the number on the back of their card or visit the Client Resource Center for more information.
Meanwhile, Citi says eligible credit card customers will have access to credit line increases and collection forbearance programs.
Finally, American Express has an existing financial hardship program that offers lower monthly payments, relief from late payment fees and temporarily lower interest rates — among other things — if you qualify.
Money expert Clark Howard says the key is to keep the lines of communication open with your credit card company.
“Banks operate on a mode that people who contact them tend to be looked at differently than people who hide from them,” Clark says.
"So it's not that you don't talk to the bank. [Instead] you call them and say, "You know, I'm in in a tough way right now. I'm hoping I'll be back to work next month. And then I'll be able to get these payments done."
As part of the discussion, you’ll also want to ask certain questions of your lender. Examples of these questions include:
- Can I skip a payment at this time?
- If so, will it be reported to the credit bureaus as a 30-day late pay?
- Will interest continue to accrue while I'm skipping a payment?
Consumer Action Center Director Lori Silverman says there are a few additional requests you should consider making:
“I am also suggesting [credit card customers] ask for fee waivers, extending payment due dates, a lower interest or even zero interest for a period of time,” she says. “I tell people it is better to call and ask than to just not pay.”
According to Clark, the most important thing to keep in mind is that credit card debt is unsecured.
That means there’s nothing the credit card company can take from you or do to you — other than ruin your credit — if you can’t pay your bill.
In fact, Clark encourages all consumers who are struggling to pay their bills in light of the coronavirus to focus on paying for their food expenses, mortgage or rent, their car note and utility bills first and foremost.
So you can officially drop paying the credit card companies to the bottom of the list, but not ignore the situation completely.
The bottom line is that you have to ask your credit card issuer for help if you need it. And you need to be proactive about it. This isn’t something you should ignore.
Meanwhile, be prepared for extended wait times on customer service lines if you choose to call the number on the back of your card. A better option might be to log into your account online and use the chat feature, if one is available. But if you must call, try to do so during off-peak hours.