Get a credit card reprieve

By CreditCards.com

To err is human, especially when it comes to credit. To forgive is divine, but when it comes to your credit card company, that's probably not going to happen.

To forbear . . . now, that's quite a different story.

As more people lose their jobs or otherwise come under financial stress in this economic crisis, many credit card companies are granting one or more types of forbearance to hard-pressed cardholders.

What is forbearance? The most important thing to remember is that it's not forgiveness; you still must repay your credit card debt. But forbearance programs can offer temporary reprieves from your obligations.

In some cases, you might be able to postpone payments for six months to a year or even longer. Your minimum monthly payment might be lowered. Your interest rate might be reduced. Or some fees might be eliminated.

It depends on your particular situation.

"Our objective is to help customers who are experiencing financial hardship," said Betty Riess, a Bank of America spokeswoman. "If a customer cannot afford to make regular payments or falls behind on an account, our customer-assistance department proactively reaches out to them."

Wise consumers don't wait for that.

Credit counselors and card issuers say cardholders who lose their jobs, encounter medical emergencies or find themselves in other financial predicaments should contact their creditors before the situation becomes acute.

Issuers beef up programs

During the last quarter of 2008, as the economy truly tanked, Citi accepted about 350,000 accounts into its forbearance programs, which can offer an adjustment of loan terms or a consolidation of balances.

"Citi is offering new forbearance programs with broadened eligibility criteria, affecting accounts in earlier stages of delinquency," the company reported Feb. 3 in a progress report related to its participation in the federal Troubled Asset Relief Program. "These include payment incentives, match payments and balance-consolidation programs that accelerate the reduction, or amortization, of card loans without materially increasing the cost to consumers."

• Talk back: Have you gotten a raw deal from a credit card company?

The company said it also was ramping up programs to help customers who are current on their accounts but are beginning to find themselves in need of help.

Meanwhile, Bank of America modified nearly 850,000 credit card loans in 2008, Riess said.

Discover Financial Services, with 50 million Discover Card members, is beefing up its online and call-center operations that serve card members looking for help, Discover spokesman Matthew Towson said. Assistance ranges from individualized payment options to deep -- though temporary -- reductions of interest rates for people experiencing "severe hardships."

In addition, Discover stops sending balance transfer offers, blank checks and other promotional mailings to accounts that begin edging into the high-risk category, Towson said.

At JPMorgan Chase, counselors have the option to restructure credit card loans by reducing interest rates, suspending future late or over-limit fees and extending repayment terms, spokeswoman Gail Hurdis said.

Continued: Car issuers trying to reduce risk

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