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Credit card debt during coronavirus: Relief options and tips

For many people, credit cards offer an important resource when money is tight, and if you’ve lost income recently as a result of the coronavirus pandemic, your credit cards may be serving as an important lifeline in meeting basic needs.

At the same time, if you’re not able to make your payments on time, credit card debt can add up quickly and result in longer-term financial challenges. Many credit card companies, however, are prepared to work with customers impacted by the pandemic.

If you can’t make your credit card payment, or think you might not be able to soon, notify your credit card company as soon as possible.

Here’s your guide to understanding your options and the right questions to ask:

Coronavirus credit card relief programs

Many credit card companies are offering some form of financial relief to customers impacted by the coronavirus pandemic.

In order to take advantage of any of these relief programs, you’ll need to first contact your provider to formally request financial assistance. Be aware, however, that many companies are asking you to first visit their websites or use their mobile apps because they’re experiencing longer-than-normal wait times on the phone.

While it’ll vary based on the company, here are some of the most common forms of assistance that companies are offering:

Lowering or deferring your monthly minimum payment

Many credit card companies are offering emergency forbearance, which allows you to skip or reduce your payments for a limited period of time. Keep in mind you’ll need to make up any skipped or reduced payments after your forbearance period ends. When forbearance ends, you won't be asked to make up missed payments immediately, but you will need to resume making at least your minimum monthly payments, which may have changed.

Waiving or refunding late fees

If you miss a payment, your credit card company would generally charge you a late fee. During the coronavirus pandemic, however, many companies are waiving or refunding late fees, if you request financial relief because of the pandemic.

Reducing your interest rate

A credit card’s interest rate is the price you pay to the company for the ability to borrow money. Your credit card company may temporarily reduce your interest rates for a hardship if you ask for it. Remember that the credit card’s interest rate will return to normal when the term ends.

Establishing a payment plan to pay off existing balances

If your hours have been reduced or you’re only able to make a portion of your payment, you may also be able to secure a repayment plan that works better for your current situation.

How to request help from your credit card companies if you’ve been impacted by the coronavirus pandemic

Missing a payment on your credit card or paying it late can result in fees or added interest, but it can also have a negative impact on your credit score. This is why it’s important to contact your credit card companies immediately if you know you can’t pay your bill.

Here are important steps to requesting relief.

1. Tell them you’ve been impacted by the coronavirus pandemic

First and foremost, make sure to tell them you’ve been financially impacted by the coronavirus pandemic and need help.

Most credit card companies are currently offering programs if you’ve lost income because of the pandemic. Be prepared to provide documentation about your current situation.

2. Ask questions about the credit card relief packages they offer

While your credit card company may offer up one or more options, have a list of questions prepared in advance. You want to make sure you’re completely comfortable with the terms before you agree to these options.

Here are key questions to ask:

  • If I can’t make my payment as a result of the coronavirus pandemic, do you have a financial relief program?
  • Are there fees associated with these options?
  • If I’m able to defer or lower my monthly payments, will interest continue to accrue during this relief period?
  • How long does the relief period last and when will I need to start repaying my bill?
  • What happens if my financial situation hasn’t changed once the period ends? Is there an option to reevaluate?
  • What information will be reported to the credit reporting agencies?

Note: that the recently passed Coronavirus Aid, Relief, and Economic Security (CARES) Act places special requirements on companies that report your payment information to credit reporting agencies if they provide payment relief due to the coronavirus pandemic.

  • Will I lose the ability to charge anything to my card if I enroll or request relief?

3. Get a written copy of your agreement

If you choose to move forward with a financial relief option, it’s important to understand the terms of the agreement before agreeing to anything. Once you’ve accepted a relief option, make sure to get a copy of the agreement in writing.

During the relief period, you want to make sure to look at your statement each month for any errors or inaccuracies, and if you see anything, make sure to refer back to the agreement so you can dispute it.

How to stay on top of your credit card bill

If you can’t make your payments, you’re likely facing a number of tough financial decisions, but even in difficult times, there are several good rules of thumb that can help you stay mindful of the credit card debt you have, so you’re ultimately able to recover quicker.

Make your minimum payment, if possible

This may be difficult guidance if you’ve lost your income and you’re having to prioritize your bills. There may be cases, though, where you get financial assistance from your credit card companies, but your interest continues to accrue. If this is the case, making the minimum payment–and making it on time–could help ease the burden later on.

Pay attention to your bill and look for errors

If you think there’s been an error on your credit card statement, send your credit card company a billing error notice that disputes the charge.

Your credit card company has 30 days to confirm receipt of your notice as well as two complete billing cycles – but no more than 90 days – to investigate and respond to you.

The credit card company can show good faith efforts to obtain the necessary information and make a determination as quickly as possible, and complies with all other requirements pending resolution of the error.

The credit card company can’t do any of the following while the billing error is being investigated:

  • Ask you to pay the amount in dispute
  • Report the amount in dispute as “unpaid” to credit reporting agencies
  • Close your account solely because you filed a billing error notice that was in good faith

Check your credit reports regularly

You can typically check your credit reports for free, once a year. However, the three major credit reporting agencies – Experian, TransUnion and Equifax – are currently allowing consumers to check their reports weekly for free .

If you sign-up for a credit card relief package and are meeting the terms of that relief package, such as making a lower minimum payment, the company must report to the credit reporting agencies that you are “current” on the account. However, if you were already behind on your payments at the time you receive relief, the lender is not required to report that you are current.

And, if you find an error, you should work to dispute it, this is when it would be helpful to have a copy of the written agreement on hand.

Learn how to protect your credit during COVID-19

Know your debt collection rights

If you have a debt in collection or a collector is attempting to contact you, it can make a tense time feel even more stressful.

It’s important to first verify their identity to make sure it’s a legitimate collector, but you also have a number of rights and collectors can work with you on realistic repayment plans.

Learn more about your debt collection rights, including how to contact and negotiate with collection companies

Find more information regarding COVID-19 from CFPB

We’re working to continuously update information for consumers during this rapidly evolving situation.

We will publish all COVID-19-related information and blogs to our resource page. Information should be considered accurate as of the blog publish date.

See our COVID-19 resource page

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