Amex Financial Relief Program: how it works, what happens to your card and what to ask before you enroll

The Amex Financial Relief Program is a hardship arrangement set up account by account for eligible cardmembers who are struggling to make payments. Amex says its payment plans can temporarily lower your interest rate, provide relief from late payment fees, lower your monthly payment and keep the account from going further past due (opens in a new tab), as long as you follow the plan's terms. Enrolling changes how the card works. Short-term plans may allow purchases up to a reduced spending limit and are not reported to credit bureaus, while participation in a long-term plan is reported (opens in a new tab). The exact payment, rate, length, card limits and what a missed payment does are set for your account, so get them from Amex in writing before you agree.

What does Amex offer through the program?

Amex describes the program as help for eligible cardmembers with an outstanding balance. Its public page lists a temporarily lower interest rate, relief from late payment fees, a lower monthly payment, and protection against the account going further past due if you abide by the terms (opens in a new tab).

Those four items are possibilities, not a fixed package. The rate, payment amount, fee treatment and length are set for each account, so two cardmembers can leave a call with different terms. Amex runs the program itself and decides who is eligible. If the plan lowers your interest or your payment, that changes how the balance is repaid; any cancellation of principal is a separate term to ask about.

Amex describes two kinds of plans. Short-term plans can provide relief for eligible cardmembers for up to 12 months after enrollment (opens in a new tab). Long-term plans are meant for ongoing hardship and last longer, with the terms given to you at enrollment. Which one you are offered shapes both card use and credit reporting, so ask which one is on the table.

Can you still use an Amex card during the program?

Possibly, depending on the plan. Amex says enrollment will affect your ability to use your cards (opens in a new tab), and that short-term participants may be able to make purchases up to a reduced spending limit. A long-term plan can look different, and the terms are the ones you receive at enrollment.

Amex also says an account may be canceled if you are removed from the program for not following the terms, including missing consecutive payments. Ask Amex these questions before agreeing:

• Will the card stay active, and what will the reduced spending limit be?
• Will recurring charges and subscriptions keep working?
• Are authorized users affected?
• If the card is canceled or deactivated, what are the conditions for reinstatement?

Membership Rewards points are another account-specific item. Amex says eligible cardmembers can use points to cover eligible charges, and that points do not satisfy the minimum payment (opens in a new tab). What happens to your points while the card is inactive or after a cancellation is a question for Amex before you enroll.

Cardholders describe different outcomes online, from temporary deactivation to cancellation to later reinstatement. Those are individual experiences on individual accounts, so your written terms are what apply to you.

Is the Amex Financial Relief Program reported to credit bureaus?

It depends on the plan. Amex states that short-term enrollment is not reported to consumer credit bureaus, and that long-term payment plan participation is reported, although being enrolled in a payment plan does not directly affect credit scores (opens in a new tab).

Several other points affect your credit alongside that:

• Enrolling before the account is reported past due may keep it from being reported further past due, as long as you follow the terms. A past-due status already on your report is not necessarily erased.
• A reduced credit limit may hurt a score because it raises utilization, which is the share of your limit that you are using.
• A missed payment may be reported and may hurt a score.
• Removal from the program for noncompliance can lead to cancellation, which Amex says may hurt your creditworthiness.

How much any of this moves a score depends on your payment history, balances, limit and the scoring model. The CFPB advises people who get a hardship arrangement to check their credit reports and make sure the creditor reports it accurately (opens in a new tab). Look at all three reports (Equifax, Experian and TransUnion) after you enroll, and dispute anything wrong with both the bureau and Amex.

What happens if you miss a payment in the program?

The protection against going further past due applies only if you abide by the program's terms (opens in a new tab). Amex says that failing to comply, including by missing a payment, may result in the information being reported to consumer credit bureaus, and that removal from the program for missing consecutive payments may result in cancellation of the account (opens in a new tab).

Outside the program, the CFPB says missed payments can lead to late fees, interest, collection activity, credit damage and possible lawsuits (opens in a new tab), depending on the creditor and the account's status. Whether Amex would sue over a particular balance depends on the account, so a reader worried about a lawsuit or a garnished bank account can read what happens when a credit card company goes after a bank account.

Before enrolling, ask Amex what one missed payment does, how fast it must be made up, and whether an ended agreement can be reinstated. The grace period, cure rights and late-fee treatment are all part of your written terms.

What happens when the program ends?

The ending terms are where plans differ most, and they are set for your account. Ask Amex to put these in writing:

• The ending date and the payment due after it.
• The interest rate that applies once the plan ends.
• The balance at that point and whether interest accrued during the plan.
• Whether the card will be active, limited or closed.
• Whether the account can go back to normal terms, and how.

The CFPB also suggests asking how interest accrues, how long the relief lasts and what happens when it ends (opens in a new tab). If your income has not recovered by then, say so early; the CFPB suggests telling the card company how much you can pay, when normal payments might resume and for how long you need the new payment.

How is this different from debt settlement or credit counseling?

A hardship plan is repayment help from the creditor itself. The CFPB describes debt settlement as negotiating with creditors to resolve debt for less than the amount owed, and warns that settlement companies may charge expensive fees, encourage you to stop paying, increase collection activity, damage your credit and expose you to lawsuits (opens in a new tab).

Nonprofit credit counseling (opens in a new tab) is a third option. It covers budgeting and debt management, and a debt management plan may have you make one monthly payment to the counseling organization, which pays your creditors. Fees can apply, and a plan does not necessarily lower the principal.

The FTC (opens in a new tab) says a legitimate debt-relief provider should not demand payment before providing the promised service. It lists a guarantee to settle all your debts or get fast forgiveness, unexpected calls or texts, and requests for your personal or financial information as warning signs. The CFPB adds promised percentage reductions and claims of a "new government program" for credit card debt to that list. A promise that Amex will settle for a set percentage matches those warning signs.

If a reader is asking what government help exists for paying down card debt, the CFPB's answer points to contacting the card company and to nonprofit credit counseling, as described above.

Could forgiven debt create a tax bill?

Only if debt is actually canceled, which a lower rate or payment does not do by itself. Canceled debt is generally included in gross income unless an exception or exclusion applies (opens in a new tab). A lender generally must issue Form 1099-C when an applicable financial entity cancels $600 or more of debt and an identifiable event occurs (opens in a new tab).

The IRS lists bankruptcy and insolvency among the exclusions. You are insolvent to the extent your total liabilities exceed the fair market value of your total assets immediately before the cancellation (opens in a new tab), and the insolvency exclusion is limited to that amount. Form 982 reports an exclusion, and excluded debt may require reductions to tax attributes. If a settlement or any canceled amount is on the table, ask Amex whether any principal is being canceled and whether tax reporting is expected, then raise it with a tax professional.

What should you ask Amex before enrolling?

The CFPB recommends explaining why you cannot make the current payment, what you can afford, when normal payments may resume and how long you need the new arrangement. From there, take this list to the call:

1. Why is the current minimum payment out of reach, and what amount can I afford?
2. What payment will apply, and for how long?
3. What interest rate applies, is it fixed for the plan, and does interest keep accruing?
4. Are late fees or other fees waived?
5. Is this a short-term or a long-term plan?
6. Can I use the card, and what is the reduced spending limit?
7. Will recurring charges continue, and are authorized users affected?
8. Is enrollment reported to the bureaus, and how will existing past-due status be reported?
9. What happens if I miss one payment, or consecutive payments?
10. What happens to Membership Rewards points?
11. What happens when the plan ends, and can the card be reinstated if it is canceled?
12. Will any principal be canceled, and could Amex issue Form 1099-C?
13. Can the full terms be sent to me in writing?

Use the phone number on your card or in your official account, and keep records of every call, confirmation, statement and written term. Make the required payment by the stated date, then keep checking the account and your credit reports. If something is reported wrongly, dispute it with the bureau and with Amex, and keep your records with the dispute.

Frequently asked questions

How does the Amex Financial Relief Program work?

Amex sets up a payment plan for an eligible cardmember that may lower the interest rate, relieve late payment fees and lower the monthly payment. The terms, including how long it lasts and how it affects card use, are specific to the account.

Can you get debt forgiveness through Amex?

Amex describes the program as lower rates, fee relief and lower payments, not as principal forgiveness. If you are offered any cancellation of principal, ask Amex for it in writing and ask whether a Form 1099-C will be issued.

Will a hardship plan hurt your credit score?

Amex says being enrolled in a payment plan does not directly affect credit scores. A reduced credit limit, a missed payment or a cancellation can affect a score, and long-term plan participation is reported.

Does Amex cancel your card for hardship?

Amex says enrollment affects card use, and that removal from the program for missing consecutive payments may result in cancellation. Ask whether the card stays active, what the spending limit becomes and what the conditions for reinstatement are.

What government help is there for paying off credit card debt?

The CFPB tells people who cannot pay to contact their card company right away and describes nonprofit credit counseling as help with budgeting and debt management. It warns about companies that claim to offer a new government program for credit card debt.

Where to go next

If Amex has also asked for proof of income, what an Amex financial review involves covers the documents and your notice rights, and why card issuers lower credit limits explains the utilization effect on a score. For approvals more broadly, are banks tightening credit covers what named federal data show. A financial professional such as a credit counselor, tax preparer or bankruptcy attorney can look at your full situation, and the CFPB's pages on credit counseling and debt relief are the places to start with a regulator.