Don’t Count on Credit Card Forbearance if You are a Good Customer

Have you ever been in the spot where you have to make choices about which bills you will pay and which will have to wait?  Well, my family is almost there.  Though we have been hanging on pretty well since The Man’s job loss, things have finally gotten to the nitty gritty.  It is becoming apparent that within the very near future we will have to make a decision between buying food and making credit card payments.  Thankfully, this should be of short duration, since my husband did just start a new job (yes, we are all MUCH relieved!); and after a 2-month training period — during which he receives reduced pay — his salary will become something we can live on again.

I thought it was best to try for credit card forbearance BEFORE you get into a tight spot. I guess that's not true anymore! But I’m not stupid.  I can read the writing on the wall.  I know that if I choose food over credit card payments, even for a short time, there will be fees added to my credit card accounts and reports sent to credit score companies.

I would like to avoid that BEFORE it happens, thank you very much.  Because I am a good customer, and I want to remain so.

So I made a phone call to Discover, which is who we have our largest balance with and consequently the largest minimum payment.  Discover’s minimum payment is always more percentage-wise than any other credit card company, anyway — which normally I like, because it means my balance goes down more.  But when hard choices are being made, that’s when that higher minimum payment is difficult to come up with.

So I asked Discover if they could temporarily reduce my minimum payment.  Maybe just for about 6 months, until my husband is fully out of training and has been earning what will now be his regular income for long enough for us to get caught up again.

This is called “credit card forbearance” — when a credit card company allows a customer to skip payments or pay less than the minimum for a specified period of time.

Not surprisingly, the first customer service agent I spoke to said she needed to send me somewhere else.  She transferred me to what I think she called the “cardmember action team.”  (BTW, Discover has agents that are clearly located in the continental US, are easy to understand, and communicate like intelligent human beings.  Just sayin’.)

The new gal did not have good news for me.  She said they had no option for reducing the minimum payment “at this time.”  I expressed my disappointment and asked to speak to a supervisor.  She willingly complied.

Ms. Supervisor had the same answer as everyone before her.  She did say that different options are available at different times, and if I call back in a few weeks, there might be a different answer.  She was appropriately sorry that she could not help me.  But the punch line was still that she could not help me.

WHY COULD SHE NOT HELP ME?  BECAUSE I AM A GOOD CUSTOMER.  Ms. Discover Supervisor was honest when I asked her the point blank question, “are there more options available after I miss a payment?”  She said yes.  I am grateful that she was truthful with me, but it does show up the big flaw in the system.

The truth of the matter is that credit card forbearance is a lie for good customers such as you and me.  I am not late on payments yet.  I am trying to call ahead of time to avert a crisis.  But both Discover and Citibank (whom I called a few days later) were adamant that there was nothing they could do for me, since my account is still in good standing.

Both companies were quick to reassure me that they do not report to credit score companies until the account is fully 30 days past due.  Well, thank you very much, but that is small potatoes.  I do not want to be late AT ALL.  I am willing to pay a portion of the payment in good faith.  I am willing to pay the entire balance over time and not resort to consolidation or settlement.  But that is not enough for them to be willing to help me before I run aground.

The system that says that you have to be a bad customer before you can receive help is a faulty system.   And to me, it is proof that serving the customer only goes so far for the credit card industry.  They don’t really want you in a good place financially.  They make more money when you can’t pay your debts in full each month.

So OF COURSE they’re not gonna “help” you until you are completely under their thumb with a late payment or two.  That’s when they have you right where they want you.  They want your blood AND your first-born child.  They want you to be so stuck in their system that it is not easy for you to get out.

“You can check out any time you like, but you can never leave…” –the Eagles, Hotel California

As credit card companies go, my own experience is that Discover is perhaps the best.  Calling there is always a pleasant experience, even when they have to say no.  But the fact is, they still have to say no, because that’s the system.

The moral of this story is to stay away from credit cards.  It is too easy, even with the best of intentions to pay off your balance every month, to get sucked in.  And then when there is an unexpected income reduction or loss, you cannot expect credit card forbearance, or help of any kind, until AFTER your ship is taking on so much water that you are manning the life boats and hoping not to drown.

All of this makes me even more motivated to start starving the credit card beast instead of feeding it what it wants.  Becoming debt free has never been more important to me.   Are you with me?

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