At the end of December 2020, around 2.87% of accounts in the auto, credit card, mortgage or unsecured personal loan accounts were still in some form of financial hardship status.
But the percentage of accounts in that status continue to fall from a high of 4.77% in May 2020, according to TransUnionâs Financial Services Monthly Industry Snapshot Report.
TransUnion data includes all of the accounts with accommodations at the end of December plus those that had accommodations pre-pandemic.
The percentage of credit card accounts in financial hardship status fellÂ from a high of 3.73% in May 2020 to 2.42% in December 2020.Â
Repayment preferences vary
Among those consumers with loan accommodations, plans to repay the money were diverse, according to TransUnion.
The research showed that around 25% of them want to return to making regular payments and negotiate with lenders to increase the length of the loan, while 19% would like to continue the accommodation and 17% want to catch up by making bigger payments.
See related: Credit card spending rebounds from pandemic plunge
Delinquencies and hardship program situation surprisingly positive
Ted Rossman, industry analyst for CreditCards.com, said that in general, the outlook for delinquencies and hardship programs is surprisingly positive.
âDelinquencies have actually fallen during the pandemic and fewer customers than we initially expected have enrolled in hardship programs, plus many have already gotten back on track,â Rossman said.
For example, Chase reported that more than 90% of customers who exited their assistance program have remained current on their payments.
And, according to the ABA Banking Journal, âBank card delinquencies fell 109 basis points to 1.52% of all accounts in the second quarter, declining to the lowest level on record. In the third quarter they were essentially flat.â
Rossman noted that government stimulus programs deserve a lot of credit, along with many consumers spending less and making debt payoff a priority.
âIt seemed like the stimulus impact was starting to wane late in 2020, but Congress and the Trump Administration agreed on another round of stimulus right before New Year’s and the Biden Administration is intent on implementing an even larger program soon,â Rossman said.
Rossman said weâre not out of the woods yet, but there’s growing optimism that the worst has passed and we will not see nearly as many delinquencies and defaults as we did during the 2007-2009 financial crisis.
See related: What to do if your credit card is closed due to delinquency
As 2020 ended, we left behind some challenging times â and some valuable credit card perks, like $20 streaming and mobile statement credits the on The Platinum CardÂ® from American Express. (Both expired on Dec. 31, 2020.)
Fortunately, Amex hasnât left Platinum cardmembers with nothing in the place of the expired perk. On the contrary, the issuer has added yet another exciting benefit.
See related: Amex adds Uber Eats Pass for Green, Gold and Platinum, Uber Cash credit on Gold
For a limited time, Amex Platinum cardholders will be able to enjoy a $30 monthly PayPal credit. While itâs less than the cumulative $40 in monthly streaming and mobile credits the issuer offered late last year, the perk still offers a great value and can be very versatile.
How the new PayPal credit works
Amex Platinum cardmembers will be able to use the new perk through June 30, 2021. No registration is required, and the credit will be applied automatically.
To use the perk, link your American Express Platinum card to your PayPal account and set it as the default payment method. Now, when you shop at eligible online merchants, you can select to check out via PayPal and get up to $30 credited back to you in your monthly statement. Youâll earn Membership Rewards points on this type of transactions as well.
Note, however, that peer-to-peer payments arenât eligible for this offer, and you also canât use it on gift card purchases or prepaid card reloads.
Receive up to $880 in credits with Amex Platinum in 2021
This perk is far from the first valuable credit offered on the Platinum card.
The credits on the Amex Platinum include annual Uber credits of up to $200 ($15 per month plus an extra $20 in December), an up to $200 airline-fee credit, up to $100 Saks Fifth Avenue credits per year, a $100 Global Entry or $85 TSA Precheck application fee credit every four years and a $100 hotel credit every time you book with The Hotel Collection.
The $30 monthly PayPal credit will be available through June â for up to $180 in PayPal credits in total.
The newly added limited-time perk brings the total credits you can receive from the Amex Platinum up to $880 in 2021 (if you only use the hotel credit once).
Considering the cardâs annual fee is $550, you can get a lot of value from your Amex, especially if we get to see travel finally coming back this year.
The new $30 monthly PayPal credit on Amex Platinum may be less valuable than the discontinued $20 streaming and mobile statement credits, but itâs versatile and easy to use â PayPal checkout is available at thousands of online retailers, including major ones, such as Walmart, Target, Home Depot and others.
Coupled with other credits and perks the Amex Platinum offers, the new benefit drives up the value of the card, making it a travel credit card thatâs worth it to have even in the times when travel is limited.
In response to the coronavirus pandemic, major credit card issuers are offering relief to their customers.
Even though many places around the country are open, the pandemic continues to impact the U.S. economy. Workers are still at risk of being laid off or facing reduced hours or pay.
“This is a rapidly evolving situation and we want our customers to know we are here to provide assistance should they need it,â Anand Selva, chief executive officer of Citiâs consumer bank, said in a statement in Spring 2020.
At the same time, scammers are now trying to take advantage of coronavirus concerns by sending out fake emails about the virus that are designed to steal consumersâ personal and financial information or to infect their computers with malware.
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Many credit card issuers are allowing customers to opt into financial relief programs online. These programs are a convenient way to access short-term relief. But it could come with a long-term cost as many cardholders will continue to see interest accrue. With the average credit card interest rate sitting at 16.05%, cardholders might find more cost-effective relief through other options.
Here’s what issuers are currently offering:
Cardholders who are having difficulties can get assistance through American Express’s financial hardship program. Eligible cardholders have the option to enroll in a short-term payment plan, which provides relief for 12 months, or a long-term plan, which can provide relief for either 36 or 60 months.
Under both options, you will receive lower interest rates, plus waived late payment fees and annual fees. But you might not have access to certain card benefits and features.
If you enroll in the short-term plan, you might be able to continue putting new purchases on the card but with a reduced spending limit. If you are participating in the long-term plan, you will not be able to use the card.
Amex will report participating cardholders to the credit bureaus as current, assuming they comply with the program’s rules. But the program’s terms do offer some important caveats: Amex will inform the credit bureaus that you are enrolled in a payment assistance program (if you’re in the long-term plan). And under both plans, Amex will report that you have a lower credit limit.
While these factors do not have as much of an impact on your credit score as a delinquent account does, it could still signal to other lenders that you might be having some financial hardship.
Bank of America
Bank of America cardholders who have trouble paying credit card bills can request a credit card payment deferral by calling the number on the back of their card.
To qualify for payment assistance, cardholders must be carrying a balance, according to the website.
Bank of America sent an email to Preferred Rewards members in May 2020 stating that the company had temporarily suspended the annual program review process. Members whose assets dropped below the regular threshold to keep their status would continue to qualify for program benefits. It is unclear if Bank of America is still suspending this program.
Barclays urges credit card account holders to request payment relief online. As of May 4, 2020, the bank is granting payment relief for two statements, but interest will continue to accrue.
âWe understand that this is a time of uncertainty for many people, and we know that there may be instances where customers find themselves facing financial difficulties. Capital One is here to help and we encourage customers who may be impacted to reach out to discuss how we might be of assistance,â the bank said in a statement.
In a March 26, 2020 update, Chairman and CEO Rich Fairbank confirmed that they are offering waived fees and deferred payments on credit cards for some cardholders.
Because each customerâs situation is different, the bank encourages customers to contact it directly. To contact Capital One customer service about an existing account, call (800) 227-4825.
See related: How to clean your credit card
Previously, Chase Bank stated that customers will be able to “delay up to three payments on your personal or business credit card” if needed, with interest continuing to accrue. The website currently does not specify how many payments cardholders can defer.
It also stated that active duty military members who are responding to a disaster might have access to additional benefits. Servicemembers can call the bank for more information.
In a letter to shareholders, the company’s CEO, Jamie Dimon, also promised to not report late payments to the credit bureaus for “up-to-date clients.”
See related: Chase offering limited-time bonus on food delivery for some cardholders
Citi customers who have been impacted by the coronavirus pandemic might be eligible for assistance. Previously, the bank was waiving payments and late fees for two consecutive billing cycles. However, Citi has ended its pandemic assistance program.
“Due to a significant and steady decline in enrollments, our formal COVID-19 assistance program has concluded and we will focus on providing assistance options to those customers financially affected by COVID-19 on a case-by-case basis. We continue to closely monitor the situation and will evaluate additional actions to support our customers and communities as needs arise,” a spokesperson for Citi said in an email.
During the bank’s pandemic assistance program, interest continued to accrue, but accounts that were current at the time of enrollment were not be reported as delinquent.
Discover will be extending relief to qualified customers who are experiencing financial difficulty caused by the spread of COVID-19.
“We encourage them to contact us by calling and are directing them to www.discover.com/coronavirus for phone numbers for each product line and other FAQs,” Discover said in a statement earlier this year. “We also can provide relief through our mobile text app, which connects a customer directly with an agent.”
Discover it Miles cardmembers can also put their miles towards their bill â including their minimum payment.
See related: What to do if you can’t pay your business credit card bill
Apple Card customers can enroll in an assistance program. Previously, cardholders could waive payments without accruing any interest. The website currently doesn’t specify if this is still the case.
Cardholders can defer payments for three billing cycles. Though interest will continue to accrue, enrolled cardholders will not receive late fees, and their accounts will be reported as current, as long as accounts were not delinquent at the time of enrollment.
Synchrony is extending relief to customers experiencing financial hardship. The company’s website previously stated that this could include payment relief for up to three statement cycles, while interest would continue to accrue. The website currently offers no specifics about what the issuer is prepared to offer.
Truist (formerly SunTrust and BB&T)
Previously, Truist offered payment relief assistance to customers with personal and business credit cards, among other products. As of April 14, it was willing to delay payments for up to 90 days. The website currently offers no specifics about what the issuer is prepared to offer.
Previously, impacted cardholders could defer monthly payments for two consecutive billing cycles. The company’s website currently does not specify what assistance cardholders can expect to receive.
See related: Coronavirus stimulus legislation doesnât suspend negative credit reporting
ultimate guide to coronavirus limited-time promotions for more offers designed to help cardholders maximize rewards amid the coronavirus pandemic.