Need relief from credit card bills? Ask for it

credit cardIt's no big secret that a lot of Americans are having trouble making their credit card payments these days. High interest rates and punitive penalty fees just heap it on, and make getting out from under those bills a daunting task.

This article from MSN Money, though, explores a possible solution many people aren't even aware of: Asking their issuer to cut them some slack.

The technical industry term for this is "forbearance." It's not loan forgiveness; you still have to pay. But, according to the article, an issuer can do anything from postpone payments to lowering minimum payments to reducing your interest rate or the amount you pay in fees.

Most issuers won't tell you about these programs. You have to ask. So that's just what we did. Walletpop e-mailed the media relations departments of the "Big Four" -- that's Bank of America, Wells Fargo, Chase and Citibank -- to ask what sort of relief they were willing to offer consumers. (Remember, this is just what the bank can offer you; it's not a guarantee it they will.)

Chase didn't get back to us by our publication date. Of the remaining three, Wells Fargo's rep said they offer several options, and gave us some details about some of the most common ones.

They say they can reduce the interest rate in some circumstances and/or will give customers guidance and a payment schedule that lets them pay off their balance.

Bank of America said it can lower interest rates, reduce monthly payments and eliminate fees. The rep also told Walletpop that Bank of America modified 1.5 million credit card loans last year alone.

Citi also told Walletpop it can reduce a customer's interest rate or reduce their monthly payments if that cardholder is having a tough time paying their bills. The Citi rep advised customers to contact them if they were having financial difficulty or anticipated having financial difficulty in the future. In other words, if you know you're going to lose your job or will have to take a leave of absence for a long period of time, get in touch with your issuer as soon as possible.

As the MSN article points out, banks are willing to do this for customers who are struggling because it's better for them if you pay your bills rather than declaring bankruptcy.

That said, those who are maxed out on all their credit cards will probably be directed to a non-profit credit counselor, the bank reps told us. This goes back to the Citi rep's earlier advice: Don't wait until you're seconds from drowning before asking for a life preserver. Banks are more likely to help you out before you get in entirely over your head.

On a related note, it's a good idea to stop increasing the balance on a credit card for which you're seeking forbearance. If the issuer sees you're still racking up charges, they'll be less eager to lend a hand.
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