Do Credit Card Hardship Programs Apply to Business Credit Cards?

A business credit card can be handy for charging travel, office supplies and other expenses for your small business. But making payments could be a struggle when a financial downturn hits.

If you're hard-pressed to pay your cards' minimums, a credit card hardship program could help. Here's what you need to know about this option if you have small-business credit cards.

Credit card hardship programs can offer payment relief

Credit card hardship programs help make your financial life easier when you're having trouble with credit card payments.

These programs, offered by card issuers and banks, can make credit card debt more manageable. Depending on the program terms and your circumstances, the options for credit card relief may include:

• Waiving fees temporarily.

• Reducing the interest rate in the short-term.

• Lowering your monthly payment.

• Not reporting late payments to the credit bureaus.

• Offering help to prevent your account from going past due.

In extreme situations, such as a global pandemic like COVID-19, credit card hardship programs can go a step further. Instead of lowering your monthly payment, you may be able to defer making payments on a credit card.

» Learn more: What is a credit card hardship program?

Can you get a credit card hardship for a business card?

Every card issuer has different policies for hardships. But the short answer is that yes, it's possible to get financial relief for a business credit card.

Here's a list of some card issuers that currently offer credit card hardship assistance for business and personal account holders:

• American Express.

• Bank of America.

• Capital One.

• Chase.

• Citi.

• Discover.

• U.S. Bank.

• Wells Fargo.

If you're considering credit card hardship relief, be prepared to explain the details of your situation and why you can't make your regular payments. This can help your card issuer better understand which type of credit card assistance is appropriate.

» Learn more: 7 credit card 'rules' you can break in an emergency like COVID-19

Know what you're agreeing to

Credit card hardship programs can create some financial breathing room for your business. But make sure you know what the agreement covers.

For example, say your card issuer allows you to put payments on forbearance for six months. You don't have to make your monthly minimums during that time and missed payments won't be reported to the credit bureaus.

That sounds good, but be sure to ask whether interest or fees will accrue on your balance during that time. If so, your business could come out of a credit card hardship program owing more than before.

Next, ask how your payments will be restructured once a forbearance ends. Going forward, you could have a new higher monthly minimum payment to make up for the six months of payments you missed.

Also, be aware of whether your card issuer will allow your business account to remain active during a hardship period. If your card is temporarily suspended, that could hurt your ability to make new purchases for your business to cover expenses.

If you need cash to keep your business afloat and your card is suspended, consider opening a new business credit card or applying for a business loan. But be careful: This can add to your business debt, which can make it harder to get back on your feet if you're trying to rebound from a significant sales drop.

» Learn more: 4 business credit card mistakes you can't afford to make

Consider other ways to handle business credit cards

If you're having a hard time keeping up with business credit card payments, credit card hardship programs can help, but they're not the only option.

Transferring your business credit card debt to a card with an introductory 0% APR could help lower your payments and save money on interest. You'll need to spend time researching the best small business credit cards to see which one has the best promotional offer.

Applying for a business loan to consolidate credit cards is another possibility. Small-business loans typically don't offer introductory interest rates, but if you can't find a 0% balance transfer offer, this could be the next best solution.

When comparing business loans, it's important to consider the interest rate, fees and repayment terms to make sure you can keep up with payments. Defaulting on a business loan could hurt your credit and potentially lead to other negative financial consequences, such as a creditor lawsuit.

If after looking into these options your business is still struggling with debt, don't be afraid to ask for help. Reaching out to a nonprofit business credit counselor can help you get perspective on the best solutions for managing credit during a financial crisis.