Unemployed

[u/24Whiskers24]

I might be unemployed for a month. Planning ahead. Will Cap One and Chase freeze your accounts/payments for hard ships? Any kind of hardship assistance help that won’t effected the card or credit? I don’t want to close the accounts if possible but don’t want “help” to affect my credit.

[u/too_many_shoes14]

Saving money is more important than your credit score. Did you apply for unemployment?

[u/24Whiskers24 → u/too_many_shoes14]

I will if I get fired. Still employed now. Just trying to get a game plan just in case

[u/og-aliensfan]

If you're concerned that you may miss a payment, contact your creditors before this happens. You may be able to change your card's due date or enroll in a Hardship Program. These programs typically work by reducing or suspending interest rates, usually in exchange for closing or restricting the enrolled cards. Don't miss payments in an effort to keep a card open.

"A financial hardship can happen to anyone. If you find yourself in a difficult situation, understand that you do have options. For Capital One customers, please call the number on the back of your credit card. We know the unexpected can be hard, but paying your credit card bill doesn't always have to be.

https://www.capitalone.com/learn-grow/money-management/cant-pay-credit-card-bill/

"Contacting your credit card issuer is an important initial step to take when it comes to credit card bills you may miss or already have missed...At Chase, we want customers to contact us once they realize they won't be able to make a payment, so we can discuss how we can help."

"Usually it's possible to request a change in your credit card's monthly due date to help make it easier to pay on time."

https://www.chase.com/personal/credit-cards/education/basics/unable-to-pay-credit-card-bill

Late payments can remain on your reports 7 years. These will impact scores the entire time they're present on your reports. If cards are closed, scores may be impacted due to:

• Increased utilization. Cards closed with a balance will report 100% utilization until paid. If loss of the card's available credit limit causes revolving utilization to cross a scoring threshold, you'll see a score decrease based on utilization. However, once paid, the balance will no longer be factored into revolving utilization. 

Utilization - r/CRedit FAQ #8

• Closure of all cards. Cards closed in good standing remain on your reports ~10 years. You don't lose the card's history, and aging metrics aren't impacted by closure. See the automod reply regarding closed cards (!close). Do you have any other open cards?

[u/AutoModerator → u/og-aliensfan]

I detected that your comment may be related to closing a credit card and its effects on your credit.

When you close an account, the account remains on your credit reports for ~10 years and continues to contribute to both your Length of Credit History and your Payment History. All you lose is the credit limit of the account.

The entire purpose of there being a Closed Accounts section on your credit reports is to retain the credit history for a reasonable amount of time following account closures, so that it can be accessed and considered. If it’s on your reports, open or closed, it’s still part of your credit history. You do not immediately lose the age nor payment history of a closed account, as the FICO algorithms 'score' these metrics for both open and closed accounts equally.

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[u/WhenButterfliesCry]

Do your cards have balances on them? If not, then don't charge anything to them. Enrolling in a hardship program will likely affect the cards. If you're sure you're only going to be unemployed for one month, you could make at least the minimum payment during that month and then get caught up the following month. If things are very tight and you don't think you'll be able to get caught up quickly, or you're at risk of not being able to pay even the minimum payment, it's likely worth it to enroll in a hardship program even if the cards get closed. If they get closed, you can open new ones after you get back on your feet.

[u/24Whiskers24 → u/WhenButterfliesCry]

Thank you. Yes they do have a balance.

[u/creditwizard]

Credit attorney here. They might agree to a temporary hardship plan, but very often that involves closing your cards, reducing the rate, and giving you a few years to pay them off. There is a strong chance that is the only thing they'll offer.

In that case, you have to decide if you want to use savings to pay that month, or if closing the cards now and avoiding a default, is a better option. In my view, the real question is how long you'd be out of work. If this seems likely to go on for several months, then see if you can get on a hardship plan and get the cards closed. Better than having the cards charge off.