1. How To Settle Chase Credit Card Debt

Chase debt settlement programs. Someone had over 17K in unpaid credit card bills and debt. Chase at first offered to. Citi offered a debt settlement program. If you enroll a Chase account in a credit counseling's debt management program, you should expect: A monthly payment that is 2.00% of your account balance. A minimum monthly payment of $15. An interest rate of 6%.

If you're struggling to pay your credit card bills each month, getting help from a credit card hardship program may sound like the perfect solution. But getting into one and reaping the benefits are easier for some cardholders than others, and there are myriad factors that come into play. Still, it's an option many are turning to in these tough economic times: A Bank of America modified $10 billion in consumer credit last year alone. WalletPop investigated these programs and found that while most of the major card issuers offer hardship programs, the terms and conditions can vary greatly. We also spoke with people who've been through the system like Kira Botkin (pictured right), to find out just how helpful - or unhelpful - these programs were for them. What we found: Credit card hardship programs can be a lifesaver, but you need to know what you're getting into before you say 'sign me up.' Here's how these programs worked for Botkin and others.

Woman Who Barely Has Money for Food Seeks Mercy from Credit Card Issuers For Kira Botkin, owner of a small web-based business in Columbus, Ohio, hardship programs were also a welcome respite from crushing debt. Botkin and her boyfriend purchased a house in 2008 that turned out to need expensive repairs; she was coming off a stretch of unemployment when her boyfriend lost his job, then his mother lost her home and moved in with the couple. Forced to support all three of them and keep the roof over their heads in one piece, Botkin turned to her credit cards to the tune of about $40,000. Since she was employed at that point, she was able to scrape by, until the summer of 2009, when Chase raised its minimum payment to 5% of her balance from 2%. Botkin says she called Chase in a panic.

To her surprise, it suggested the hardship program. 'I didn't even know this was a thing you could do,' Botkin says. Chase then closed her two accounts, lowered both interest rates to 6% (it later reduced one to 2%) and put her on a five-year repayment plan. Botkin's experience with Chase led her to call up her other creditors and tell them she was struggling to make her payments. 'I figured, what do I have to lose? I just said I couldn't afford my payments.

At that point, we literally did not have cash left over for food,' she says. Both Bank of America and Discover lowered her interest rates, she says, although the Discover program was for a much more limited time frame and it only dropped her rate from around 15% to about 10%. Today, Botkin says the $25,000 in debt she racked up on two of her cards is now down to $17,000. Sinking Shopkeeper Discovers Some Relief For Jon Deleeuw, there seemed to be no other alternative. Deleeuw, who has owned a card and gift shop in Seattle for five years, used credit cards - mostly personal ones - to keep his business afloat as the economy sank. Earlier this year, Deleeuw settled $68,000 in credit card debt with Bank of America, but he admits he'd tapped every source of savings by that point and still had ballooning bills. That's when he reached out to Discover regarding a card on which he was in default and owed about $5,000.

How To Settle Chase Credit Card Debt

'I told them my business was off 65%,' he recalls. 'They asked how much I'm taking home, if I think it's gong to turn around and when. I say I think I'm going to be struggling for another year,' Deleeuw says. From that conversation came the relief he was seeking: Discover knocked his credit card's interest rate down to 7% (from around 26%) and offered to waive late fees. Deleeuw says the plan required that he set up his payments on an auto-bill system that would take them right out of his checking account on the due date, a common precondition for enrollment in a hardship plan.

And he's reaching out to another creditor, U.S. Bank, to find out if he can ease the pain of paying back the $13,000 he owes them by enrolling in its hardship program. How Credit Card Hardship Programs Work While many of the banks WalletPop contacted say they reduce the actual amount owed in certain cases, it appears (form our interviews) that it's more common for customers to be offered an interest rate reduction. 'They're certainly not going to start by reducing the principal,' confirms Ruth Susswein, deputy director of national priorities at nonprofit group.

In some cases, an interest rate reduction might just do the trick: If you've fallen behind and are paying a default rate of around 30%, having that dropped to a more manageable 10% - or even less - can be a lifeline in hard times. But Susswein suggests asking about a principal reduction anyway, especially if what the company offers you is still more than you can afford each month. All the issuers we contacted said customers can reach someone who can evaluate them for that bank's hardship program by calling the number on the back of their card. Be aware, though, that some don't refer to it as a 'hardship program,' advises Susswein. Your best bet is just to say that you're struggling to make your payments and would like to talk to someone who can help you out. A spokeswoman from BB&T Bank also suggested that a cardholder whose account is already in default also contact the collections department.

Before you call, make a rough budget of your expenses, including living expenses like your mortgage or rent, utilities, food and gas. Also tally up your other credit card bills. It's very important, experts say, not to promise more than you can deliver.

If you're offered a payment that's still too high, be honest and let the bank know. If you get enrolled in a hardship program and agree to make those payments, failing to do so makes it unlikely that you'll get a second chance.

What to Look Out For 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. It might seem as if the debt is off your back, but when the program expires, you'll owe even more. Speaking of expiration, a word about program terms: Some are short-term, some last for a year or so, a rare few (such as Botkin's) are five-year plans.

A Chase spokeswoman told us that its hardship-related interest rate reductions can go for up to five years. Some banks' programs require you to call and re-enroll after a certain time frame.

None of the banks WalletPop heard from say they require customers to be behind on their payments before they'll consider a hardship request, so don't make the mistake of thinking that not paying those bills will make it easier to negotiate. Don't deliberately default, warns O'Brien.

If the hardship program turns you down or doesn't work out, having accounts in default limits your other options, she says. The biggest variation among the banks we contacted pertain to how your participation in a hardship program shows up on your credit report. Some will indicate that you're enrolled in such a program and while this doesn't effect your FICO score, it would undoubtedly be a red flag for a lender if you tried to get credit while in a hardship program.

You'll want to ask if the bank will be making any special notation that gets sent to the bureaus. Since many banks will make you close the account if you want to join a hardship program, you need to ask how that closed account will be handled.

(Discover is one of the few issuers we found that doesn't automatically close a card as a prerequisite for program participation.) In some cases, they'll note it as 'closed by consumer,' which is fine. Ask if they'll be willing to designate the closure that way, because the alternative - 'revoked' or 'closed by Bank X' - also looks like a red flag to would-be lenders. Success Isn't Guaranteed Cheryl, a social worker in Maryland, didn't have as much luck as Deleeuw and Botkin when she called Chase and M&T Bank looking for some relief in 2009. Deleeuw had taken a year off from her career as a social worker and found reentering the job market in 2008 to be a challenge. In the interim, her credit card debts piled up. When she contacted the banks begging for relief from her 29.99% interest rates, she says she was told she didn't qualify for the hardship program or an interest rate reduction because she didn't earn enough money.

Cheryl, who didn't want her last name used, says she struggled for another six months to pay her debts, then called back and lied about her income (inflating it so it would seem she earned more), which got her into programs that lowered her rates from 29% to 9% each. She was told each program was only for a year, but she says M&T Bank hasn't raised her rate yet, and she's afraid that calling them to ask about her participation in the program will lead to her rate going up. She's kept current on that account but admits she missed payments to Chase, which has led to her rate going up to 18%. When WalletPop asked Chase about this, a spokeswoman said via email that some people who are in too deep with their debts may be referred to a credit counselor instead of being given access to the hardship program. For people like Cheryl, a debt management plan created by a nonprofit credit counseling service is a better option, says GreenPath's O'Brien. Hardship programs work most effectively for people who have a temporary problem paying their bills, she adds.

If your troubles are more entrenched (if you're permanently disabled, for instance), stopgap measures might not be enough to keep you out of your debt cycle.

By Dana Dratch Published: October 21, 2010 Having trouble with your credit card debt? Your card issuer likely has a little-publicized option for you: a credit card hardship program. These are not the well-known 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). Issuers 'want to help the consumer, but are also helping themselves by having them,' says Sandy Shore, a supervisor with Novadebt, a nonprofit credit counseling agency in Freehold, N.J. 'Lots of people have had unfortunately things happen in their lives.'

The hardship secret handshake If you have a, 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. 'Most creditors will have a number right on the statement,' says Shore. It won't be obvious, but look for language along the lines of, 'If you anticipate problems paying your balance, call this number.'

The number could ring the hardship department or, more likely, a customer service department that will screen you. And if you get that customer service agent who tells you 'we don't have a hardship program,' that's a signal to hang up and call back later.

Issuers call their hardship departments by a slew of different names. If you have a general number, your goal is to get to an agent who has the power to offer a hardship program. 'What I'm finding is that they have special departments to handle these things, but they won't give out the numbers,' says Linda Sherry, director of national priorities for Consumer Action, a San Francisco-based advocacy group. 'They want customers to call the main numbers.' Say something along the lines of, 'I'm having difficulty and want to talk to someone about customer assistance,' says Betty Riess, spokeswoman for Bank of America.

The information you want to have at your fingertips: your real income and expenses. If the agent tries to take the call himself and the terms he's offering aren't what you need, be prepared to say 'thanks, but no thanks' and call back.

Once you get in Once you get to the right person or department, keep the conversation polite and factual, says Shore. Explain that you are having problems and why (cutbacks, layoffs, recent or upcoming medical bills, etc.).

'Remember that these people are listening to this all day long,' says Shore. Accept responsibility, express that you want to repay the balance, and explain your current financial problem, she says. One strategy is to make an offer. 'Be very specific,' says Plunkett. 'And don't be shy about telling them, 'This is what I can afford.' ' Some card companies have several programs.

So if what you're hearing doesn't go far enough, either keep negotiating or call back. While the issuer itself might really want to help its customers, that attitude may or may not have made it down the personnel ladder, says Sherry. The phone agent may not have a lot of decision-making power.

Some card issuers won't consider you for hardship if you're current on your bills. Others offer better deals if you are current.

And for some, it's not an issue. What a hardship will do to your card If you call asking about hardship programs, watch what you say. The limits the circumstances under which a card issuer can raise your APR, but doesn't prevent it.

'They're going to know something's up,' says Sherry. Even so, 'It may be the best way to go.' Issuers probably won't cut credit limits just because you ask about hardship programs, says Nessa Feddis, vice president and senior counsel for the American Bankers Association. 'That would discourage people from calling,' she says. Just inquiring about our hardship programs will not trigger an action.

However, if a customer indicates that they are unable to pay what is owed. then we may restrict their ability to use their accounts. Marina Norville Spokeswoman, American Express Merely inquire, though.

Don't go a step further and admit you're having trouble paying your bills. 'Just inquiring about our hardship programs will not trigger an action,' says Marina Norville, director of public affairs for. 'However, if a customer indicates that they are unable to pay what is owed, which could happen in the same conversation, then we may restrict their ability to use their accounts.' But they could also do the same thing if you miss payments or start making just the minimums, Feddis says. 'Usually when they see someone's just paying the minimums, they know something's up.' And if you apply for a hardship program, your charging privileges will be suspended, temporarily or permanently.

Some cards have hardship programs that reinstate the card (possibly with a different credit limit), when you complete the program. A smart question to ask: 'What happens to my credit card if I successfully complete the program?' Hardship's impact on your credit, credit score So what is a hardship program going to do to your credit score?

'As with anything FICO-score related, it depends on how it appears on the credit report,' says Barry Paperno, consumer operations manager for FICO, the company that pioneered credit scoring. How that issuer will report your agreement to the credit bureaus 'should be one of the first questions you ask,' he says. But figuring out how the program will impact your credit while you're in it (and after), can be tricky.

Sometimes the agent you're negotiating with honestly doesn't know how the program is reported. Others will be able to tell you exactly how it is noted. 'We don't report negatively to the credit bureaus, as long as they're not canceled while in the program,' says Norville. In some instances, negative references will come off your report if you complete the program. But you need to get a thorough understanding of what's going to happen, who's making the promise and what you can do if it doesn't happen automatically. And information on how issuers report hardship programs to the credit bureaus will likely not be included in the written hardship agreement you receive from your issuer, says Feddis.

So how do you decide if hardship is the right move? 'If you can muddle through, you want to muddle through,' says Gail Hillebrand, senior attorney with Consumers Union. But, she says, if that merely delays when - not if - you need help, then you're better off acting sooner.'

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