When you apply for a credit card, odds are pretty good that the financial hardship benefits offered with the card aren’t very high on your list. However, in today’s struggling economy, hardship seems to be the rule rather than the exception. Your Visa card may be able to help you out if you’re experiencing financial difficulty.
Short-Term Hardship Programs:
Credit card hardship programs aim to help customers get past short-term financial problems. The assistance to customers usually comes in the reduction of your interest rate, which is generally good for six to 12 months. If you miss any payments during this period, your interest rate may return to its previous level. Once the program is complete, you may be able to apply for the program again if your financial situation hasn’t improved.
Long-Term Hardship Programs:
Some banks will allow you to enter a long-term program that will help you take your balance all the way down to zero. These programs are similar to the debt management programs offered by credit counselors in that you get a long-term interest rate reduction with the goal being that your debt will be wiped out within five years, but you’ll have to close out your card. Not every Visa card issuer will offer such a plan, so be ready to settle for a shorter hardship program if necessary.
Credit card protection plans are widely available and can help you to have peace of mind as you use your Visa card. These programs might seem like a ripoff, but they can come in handy if you’re in a tight spot. Virtually every Visa credit card offers a form of insurance that covers, among other things, your entire balance if you should pass away. You can have your monthly payments temporarily canceled if you lose your job or if you have a life event like having a baby or getting married. Some Visa card issuers will even waive interest charges while you’re receiving benefits.
If you’re under extreme financial duress and your Visa card doesn’t give the kind of hardship assistance you need, there are some other options. Credit counseling is a good way to go if you don’t see any light at the end of the tunnel. Credit counseling usually leads to a debt management program, which gives you a structured way to pay off your debts at reduced interest rates. Another option is debt settlement, which allows you to bring your balance to zero for less than you currently owe. However, going this route can destroy your credit as much as bankruptcy would, so exercise caution and be sure there’s no other way out before pursuing a settlement.