Economic Perspectives with Hopeton Hay on KAZI 88.7 FM in Austin, TX

Top Credit Card Issuers Provide Payment Relief to Consumers

Posted by Hopeton on April 15, 2009

Responding to the “Call to Action” of the National Foundation for Credit Counseling (NFCC), the nation’s top 10 credit card issuers have agreed to provide additional relief to consumers struggling to repay their debts. credit-cards2

 

“This represents a significant action on the part of the creditors to take additional steps to help consumers, which is our collective mission,” said Susan C. Keating, president and CEO of the NFCC.  “This will provide those in debt with more options to stabilize and rebuild their economic lives.” 

 

For more than 40 years, consumers have avoided bankruptcy and benefited from repayment programs commonly referred to as “debt management plans” (DMPs) through which creditors provided some repayment concessions, including waiving late and over the limit fees and a reduction in interest rates.  However, in these tough economic times, fewer consumers have sufficient income to be eligible for, or the ability to maintain, a traditional DMP, often leaving bankruptcy as the only option. 

 

In response to a need to make better alternatives available to struggling consumers, the NFCC issued its “Call to Action” last fall, calling on more creditors to take additional steps to make DMPs more affordable for people in troubled financial circumstances.  The NFCC also expressed its appreciation on behalf of struggling consumers to those card issuers already providing significant concessions aligned with the “Call to Action.”  The “Call to Action” set the end of the first quarter of 2009 as the target date for adoption and implementation.  Together with the “Call to Action,” the NFCC created a strategic partnership of NFCC Agencies and Association of Independent Consumer Credit Counseling Agencies (AICCCA) to work with the top 10 credit card issuers. 

 

As of March 31, the top 10 credit card issuers have agreed to implement the changes necessary to provide both a more affordable “Standard” DMP and a “Hardship” DMP (together, the “Call to Action” DMPs) for consumers who are seeking to avoid bankruptcy, but who do not have sufficient income to qualify for a traditional DMP.  The key elements of these two new DMPs will allow consumers to maintain a reasonable monthly budget, establish a savings account for economic emergencies, make fixed monthly payments more affordable, and be out of debt within 60 months.

 

Those creditors supporting the “Call to Action” are American Express, Bank of America, Capital One, Chase Card Services, Citi, Discover Financial Services, GE Money, HSBC Card Services, U.S. Bank and Wells Fargo Card Services.  The NFCC urges all other consumer lenders to follow suit.

 

 “Many consumers are facing serious financial problems, and they should be given every opportunity to qualify for an affordable program that meets their individual circumstances and that puts them back on the road to financial stability,” said Keating.  “We applaud these creditors for recognizing the need to do more for consumers who are trying to avoid bankruptcy, and need some additional help with interest rate and fee waiver concessions so they can repay their debt.”

 

Consumers seeking more information about or eligibility for a “Call to Action” DMP should contact the NFCC Member nonprofit credit counseling agency in their area by calling (800) 388-2227 (en Español (800) 682-9832) or visit www.nfcc.org.

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One Response to “Top Credit Card Issuers Provide Payment Relief to Consumers”

  1. Pamela Bush said

    I am currently enrolled in a traditional DMP. When I called my non-profit counselor who handles my account about the new “Call to Action DMP” they have never heard of it. I even offered to fax them all the press releases that I’ve seen including the one from the NFCC who they are affiliated with. They weren’t interested in the information and told me to call me credit cards directly to see if they would further reduce my rate. I’m interested in having my dmp changed to the new terms mentioned as my husband recently lost 25% of his income due to a pay reduction through his employer. I have even emailed and called the NFCC myself. I can’t get anyone to call me back.

    Any suggestions? I’m ready to start sending some strongly worded letters…

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