BATON ROUGE, La. (WAFB) - For many people, the last couple of months have not been easy on the checkbook. Many financial advisors say ask your creditors for help, but that help may come at a cost.
Hardship programs are personalized ways creditors can offer people help during financially tough times, but this help isn’t exactly free.
NerdWallet found that one in eight Americans entered a hardship program during the pandemic to get help with things via methods like deferred payments or reduced interest rates.
But now, almost all of them are facing repercussions.
“Help from credit card issuers can come at a cost,” said Sara Rathner, a credit card expert with NerdWallet. “Consumers might have to accept a lower credit limit or freeze their account entirely, and that could be tough because people who are in hardship programs are already in an unstable financial situation.”
NerdWallet says these programs can help free up cash when you need it, but you must agree to and follow the terms of the program. That way, it doesn’t hurt you in the long run.
You can do that by getting the terms in writing from your creditor so if something goes wrong, you can refer back to your original deal.
Rathner says you can always decline if the terms just don’t fit you.
Also, check your credit report often. Get a free weekly credit check now to report anything that seems out of sorts. The three major credit reporting agencies are offering free weekly reports now until April of 2021.
The repercussions of these hardship programs are not out of the ordinary, says Rathner. However, if you know to look for them now, you won’t be surprised by the fallout in the future.
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