Credit Card Hardship Postcard
In Debt Mediation Scam, I wrote about a pitch that tries to look like an overdraft notice. A few weeks ago, I got a yellow postcard, which still tries to look official on the front:
Warning $2,000 fine, 5 years imprisonment, or both for any person interfering or obstructing with delivery of this letter US Mail 18 Sec 1702 US Code
All information held confidential
How confidential can anything be on the front of a postcard? On the back it says that I have been selected for a Credit Card Hardship Program. I have debt, but no hardship. Still they warn me that failure to respond before a given date may affect the amount of debt reduced.
I googled the 800 number and found an old blog with links to the FTC and Experian, and bland advice about credit, but no real information. I googled Credit Card Hardship Program and found many links. Yahoo Finance says:
These are not the well-known debt management plans offered through nonprofit credit counseling agencies. These are the card issuers’ own internal hardship programs.They typically include the ability to lower the interest rate, lower the minimum payment or reduce fees and penalties. They’re either short-term (often six months to a year), or permanent (until the card balance is paid). …
If you have a credit card, chances are that issuer has a hardship program. “All of the creditors have them,” says Shore.
Don’t be surprised if you haven’t heard about it. “They don’t advertise the programs, they see them as proprietary,” says Travis Plunkett, legislative director of the Consumer Federation of America. …
If you call asking about hardship programs, watch what you say. The Credit CARD Act of 2009 limits the circumstances under which a card issuer can raise your APR, but doesn’t prevent it.
They might do more than raise the interest rate. In a 2009 post, the Consumerist blog was asked, Is It Worth Taking A Lower Rate In Exchange For Closing Your Credit Card? :
“I’ve been trying since January to get the rate reduced to no avail. This time they told me that, under their hardship program, they could reduce my rate from 28% to 6%, but that would require that they close my card.”
The Consumerist advised that it was worth closing the card, but it is worth knowing what might happen before you call some unknown number.
The Daily Finance asks and answers, Do credit card hardship programs really work? Some do, but:
Be wary of offers to lower your minimum payment without a corresponding reduction in interest rates, says Aimee O’Brien, a training specialist at credit counseling group GreenPath Debt Solutions. It might seem as if the debt is off your back, but when the program expires, you’ll owe even more.
If all credit card holders have such programs, why wouldn’t they advertise instead of sending out creepy postcards?