Little Known Credit Card Programs You Should Be Aware Of

By SiliconIndia   |   Friday, 02 November 2018, 05:23 Hrs
42
cmt right
32
Comment Right
52
cmt right
15
cmt right
Printer Print Email Email


Little Known Credit Card Programs You Should Be Aware Of



Are you feeling overwhelmed and frightened about your debts?



These feelings and fears of going bankrupt arise when you find yourself in a debt spiral after running out of money you saved to pay back your financial obligations.



There is a light at the end of the tunnel, and this is a hardship program which can get you out of the debt spiral. This type of credit card program is a well-kept secret hidden by many financial institutions.



A hardship program, generally known as a credit card repayment plan, is a solution that has the possibility to save you a lot of money in interest, reduce the financial burden and ultimately get you out of your financial troubles.



Let us take a look at what this hardship plan is and the way it impacts your credit positively.



What Is A Hardship Program?



A hardship or credit card program is completely different from the particular debt management programs you see advertised in the media.



A hardship plan doesn't have any mass payment or intermediary loan companies. It facilitates you to work directly with the credit card company and take part in its unique repayment plan. Many lenders do provide hardship programs, though you’ll rarely find them publicized.



“Each creditor’s plan is a bit different,” said Thomas Nitzsche, credit educator at Clearpoint, a consumer credit counselling firm. He says that programs usually offer the following benefits:




  • A lower monthly interest


  • A smaller payment


  • Lower penalties and fees


  • A fixed payment plan



If you are facing a short-term financial bad patch - a medical emergency loss, serious car crash or job loss, then the advice of Nitzsche can certainly help you a bit, he says that telling the creditor your story may convince him (the company) to offer you the money-saving benefits of a repayment schedule.



How Can You Improve Your Credit?



Right after signing up for a hardship program, you will see a disconcerting drop in your credit rating. This usually isn’t everlasting, though it will take some months of on-time repayments and responsible behavior to get your credit score back to exactly where you want it.



If you productively complete the program, that initial drop will convert into a substantial credit score increase.



Here’s the reason why:



If you are going to sign up for a hardship plan, you might have already missed a few payments on your credit cards. Payment record is the No. 1 element in managing your FICO scores, making up 40 % of the credit score. So, you might have already noticed that your credit ratings dropped after missing payments.



Your loan provider, who reported those overdue payments to the credit reporting agencies, will now acknowledge your regular, on-time payments - which will mean great news for your credit score.



Read more news:



Google employees in San Francisco join worldwide walkout



Apple Watch most preferred smartwatch brand in US: Report



SPOTLIGHT
Technology
Facebook-owned messaging app WhatsApp is still developing its previously announced "Vacatio..
Startup City
Youth are leading India's start-up ecosystem where the median age of founder-entrepreneurs..
Finance
The Reserve Bank of India injected a total liquidity of Rs 2.98 lakh crore in the market in 20..
Career
Wiley, a global leader in research and education has announced a series of blended learning progr..
Enterprise IT
Taking on streaming giants like Netflix and Hulu, Walt Disney Co. has announced it will laun..
Entertainment
"Game of Thrones" author George R.R. Martin doesn't want season eight to be the final chapter of "..
US Indian
Facebook-owned photo messaging app Instagram has launched the beta version of its in-app sh..
Business
The Pentagon has selected Microsoft and Amazon Web Services (AWS, the cloud computing arm ..
Gadgets
Google Pixel and OnePlus smartphones are catching up and giving stiff competition to Samsu..