How Credit Card Hardship Programs Work: Eligibility and Application Process

ByNathan Paulus
Edited byRae Osborn

Updated: April 4, 2024

ByNathan Paulus
Edited byRae Osborn

Updated: April 4, 2024

Advertising & Editorial Disclosure

Dealing with credit card debt is a major challenge that can become overwhelming due to unexpected financial problems such as job loss or medical expenses. Credit card hardship programs can help cardholders manage these tough times and avoid the serious consequences of defaulting.

If you’re thinking about using these programs, you should understand how they work, who can qualify and how they might affect your credit score. With the right approach and careful planning, these programs can be an important step towards getting back on stable financial ground.

What Is a Credit Card Hardship Program?

A credit card hardship program is a relief initiative provided by credit card issuers to aid cardholders struggling with unforeseen financial hardships, such as job loss or medical emergencies. Its primary objective is to prevent default, making debt repayment more manageable through various means, such as:


By adjusting your debt terms, credit card hardship programs help keep your account in good standing, avoiding defaults' legal actions, increased rates and credit score impacts. They also provide a manageable alternative to bankruptcy, which, despite offering a fresh start, can significantly affect your credit report and financial standing. Issuers also benefit from these programs by enhancing repayment chances and building customer loyalty, encouraging continued use of their services after financial recovery.

Eligibility and Application Process for Credit Card Hardship Programs

Credit card hardship programs are not widely advertised. Customers need to initiate contact and request assistance which requires preparation, transparency and negotiation. Understand the eligibility criteria, follow the necessary steps and employ effective negotiation tactics. The goal is to get approved and get the best deal possible.

Common Eligibility Criteria for Credit Card Hardship Programs

Eligibility for credit card hardship programs typically hinges on demonstrating a genuine financial hardship that impedes your ability to make regular payments. While specific criteria may vary by issuer, common qualifiers include:

  • A significant reduction in income (e.g., job loss, reduced work hours)
  • Unexpected medical expenses
  • Divorce or separation leading to financial strain
  • Natural disasters affecting your financial stability

Proof of your financial situation, such as income statements, medical bills or a letter of termination, may be required to substantiate your claim of hardship.

How to Apply for Credit Card Hardship Programs

Navigating the path to financial relief through credit card hardship programs involves a series of strategic steps, each accompanied by key negotiation tips to enhance your chances of success.


Assess Your Financial Situation

Before reaching out to your credit card issuer, thoroughly review your financial situation. Compile a detailed list of your income, expenses, debts and any assets. This comprehensive overview not only prepares you for an informed discussion but also helps you understand exactly what relief you need.


Contact Your Credit Card Issuer

Look for the customer service number on the back of your credit card or the issuer's website. When you call the customer service number, be honest and transparent about your financial hardship. Prepare a brief explanation of your hardship and how it has impacted your ability to make payments. Clear communication about your situation can help build empathy and encourage the issuer to offer assistance.


Prepare Your Documentation

Collect all relevant documents that prove your financial hardship, such as recent bank statements, medical bills or a notice of job termination. Having these documents at hand during your initial call can expedite the review process as it demonstrates your proactive approach and the seriousness of your situation.


Submit Your Application

If the issuer requires a formal application, ensure it clearly outlines your financial situation and the specific assistance you're seeking. Highlight any temporary nature of your hardship to reassure them of your intent to resume regular payments in the future.


Review the Agreement

If approved, you'll receive an agreement outlining the program's terms. Review the terms to ensure they align with your expectations and needs. If the terms don’t meet your needs or if you believe better options might be available, don’t hesitate to ask and negotiate. But before negotiating, know the relief you need, like lower rates, waived fees or deferred payments. Ask creditors about all options to choose the best fit for your financial plan, guiding negotiations to a beneficial agreement.

After reaching an agreement, request a written copy of the terms to track conditions and ensure compliance by both parties. It also serves as a reference if there are any discrepancies or misunderstandings in the future.

Potential Drawbacks and Considerations of Credit Card Hardship Programs

When considering credit card hardship programs, it's important to recognize both the immediate relief they provide and their potential drawbacks. These programs can impact your credit score, come with certain limitations and require a plan for managing debt after the program ends. Balance these factors against your need for short-term financial relief and your long-term financial health goals.

Impact on Credit Scores and Reports

Hardship programs can influence your credit landscape through adjustments in credit scores and utilization ratios.

  • Temporary Dip in Credit Score: Some hardship programs may require closing accounts or changing the terms of your credit agreement which can temporarily lower your credit score. Ask your creditor about the specific impacts of their hardship program on your credit report to be fully aware.
  • Credit Utilization Changes: Adjustments in your credit limit as part of the hardship agreement can affect your credit utilization ratio, a key factor in credit scoring. A higher utilization rate can negatively impact your score.

Limitations and Duration of Hardship Programs

The relief provided by hardship programs is inherently temporary, with a set duration and specific usage restrictions.

  • Temporary Relief: Most hardship programs are designed as short-term solutions, typically ranging from three to twelve months.
  • Restrictions on Account Use: Enrolling in a hardship program might restrict your ability to use your credit card, limiting access to credit when you might need it most. Ensure you're clear on any account usage limitations before agreeing to a program.

Post-Program Financial Landscape

Leaving a hardship program marks a crucial phase of financial adjustment, focusing on managing debt sustainably and regaining financial stability. Preparation and strategic planning are key for this important stage of financial recovery.

  • Resuming Regular Payments: Once the hardship program concludes, you'll be expected to resume regular payments under the original terms of your credit agreement. Prepare for this transition to avoid falling back into financial difficulty.
  • Long-Term Debt Management: Exiting a hardship program doesn't erase your debt. You'll need a solid plan to manage and eventually pay off your remaining debt. Consider working with a financial advisor or credit counselor to develop a strategy that fits your budget and financial goals.

Alternatives to Credit Card Hardship Programs

A credit card hardship program is not the only option for managing overwhelming debt. However, the alternatives also come with its own set of benefits and drawbacks. When considering these options, evaluate how they align with your financial circumstances and long-term goals. Seeking advice from a financial advisor or credit counselor can provide additional clarity.

Here's a concise overview of other strategies you can consider:


Consolidate debt with low or 0% APR, reduce interest costs

Balance transfer fees, requires good credit, promotional rate ends

Simplifies payments, potentially lower interest rate

Requires good credit for favorable rates, risk of accruing more debt

Credit Counseling and Debt Management Plans

Lower interest rates without new loan, personalized advice

May need to close credit accounts, monthly service fee

Debt Settlement

Reduces total debt amount, potentially quick resolution

Damages credit score, may not reduce all debts, high fees, forgiven debt taxable

coins2 icon

To avoid future financial strains and the need for another hardship program, consider these straightforward strategies:

  • Budget Wisely: Craft a budget reflecting your income, expenses and debts. Adherence is crucial to prevent new debt.
  • Save for Emergencies: Begin with what you can when you build your emergency fund, aiming for a three to six-month expense cushion to mitigate unforeseen financial needs.
  • Monitor Credit: Keep tabs on your credit score and report, addressing discrepancies swiftly to maintain a healthy financial profile. Use MoneyGeek’s guide on how to read a credit report.
  • Limit New Debt: Use new credit sparingly and pay off monthly balances in full to avoid debt accumulation.

Discover more credit card insights using MoneyGeek’s credit card resources:

Additional Resources

MoneyGeek has a curated list of key resources for managing credit card debt and overcoming financial challenges to guide you toward financial stability:

  1. National Foundation for Credit Counseling (NFCC): Connects individuals with certified credit counselors for comprehensive debt advice and management solutions.

  2. Consumer Financial Protection Bureau (CFPB): Offers educational materials on credit card debt and consumer rights to help make informed financial decisions.

  3. Legal Services Corporation (LSC): Provides free legal assistance to low-income Americans on issues related to debt and bankruptcy, ensuring legal support is accessible.

  4. Financial Hardship: A resource for navigating financial challenges, offering access to debt relief, unemployment benefits and assistance programs.

  5. Debtors Anonymous: Offers a 12-step program for those struggling with debt, promoting financial recovery through community support and shared experiences.

  6. American Consumer Credit Counseling (ACCC): A nonprofit organization offering free credit counseling, debt management plans and financial education for financial peace of mind.

About Nathan Paulus

Nathan Paulus headshot

Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.