Study Highlights Benefits of Combining Short Term Payment Relief with Longer Term Assistance Plans for the Most Vulnerable of Consumers Struggling with Credit Card Debt
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Monday, August 28, 2023
WASHINGTON, Aug. 28, 2023 /PRNewswire/ -- A new research paper released today underscores the importance of evaluating whether the most vulnerable and distressed borrowers need longer term repayment plans soon after they first enroll in natural disaster or other emergency relief programs with credit card lenders.
Key Points:
- Moreover, consumers who enrolled in DMPs five to six months after the end of their forbearances had higher levels of delinquency than those who enrolled earlier.
- This suggests that there is a relatively short window to transition still-distressed borrowers to longer term programs before their finances deteriorate further.
- Among longer term options offered by lenders and others, debt management plans that are administered by nonprofit credit counseling agencies often provide significant interest rate reductions and a structure for paying down balances across multiple credit card lenders.
- This study is part of a broader research project to evaluate ways to improve debt resolution options for consumers who are struggling to manage credit card and other general unsecured debts.