Opinion: Opportunity Knocks for Issuers to Be The Good Guys in Bad Times

Anxious Americans are making the most of all the financial tools in their toolbox right now, but some methods can be more of a problem than a solution. 

For example, a 2025 Vanguard Group report found that a record 4.8% of retirement plan account holders took hardship withdrawals last year, but early cash-outs are rife with downsides, from the 10% penalty to applied income tax and even a possibility of it pushing people into a higher tax bracket. 

Others are borrowing their way out, with buy now pay later (BNPL) plans and expensive short-term loans. 

And then there are credit cards. Unsurprisingly, many consumers are leaning into their credit lines as a form of supplementary income.

According to a new study by Splitit and PYMNTS, “Managing Unplanned Expenses: How The Pay Later Economy Fits Consumer Needs,” 53% of consumers are concerned about meeting unexpected costs in 2025.

What’s driving this anxiety? Uncertainty about the economy. Although they can also lead to problems, in some circumstances these cards can act as a secure bridge between tough times and better days ahead. 

Here’s how credit card issuers can be the good guys in bad times.  

Ever since credit cards became widely available, people have not just used them to pay for the things they want and that are within their means, but for necessary goods and services their paychecks can’t handle. 

The Splitit and PYMNTS study found that the median cost of an emergency purchase over $250 made in the last 12 months was $605. As a one-time expense, that’s not bad. But if a charge for an emergency of that amount is made continuously, the balance will quickly build.  

Cast away judgments. People aren’t stupid; they’re desperate.

As a former credit credit and debt counselor, I know that when individuals have the option to borrow for the things they need but can’t afford, they probably will. 

That’s true even when there isn’t enough money to pay the resulting bill quickly, including when interest rates are high and the payments eat into their budgets. 

Credit card debt is the most common of financial obligations, according to a poll conducted by Talker Research for Newsweek, in which 68% of respondents said they’re currently holding onto balances. Paying these bills before interest is added is usually best, but clearly many aren’t. 

Cast away judgments. People aren’t stupid; they’re desperate.

The dramatic fallout from carrying too much debt has started. A New York Fed Quarterly Report on Household Debt and Credit analyzed Q4 data and found that consumers are carrying more credit card debt than ever before. The number of accounts more than 90 days late is up year-over-year.

Additionally, credit card interest rates remain deep into the 20s, so indebted consumers are facing hefty financing fees. When they fall behind, they’ll be hit with expensive late fees, currently averaging $32. 

Because credit cards are used by almost all U.S. adults, issuers are in a great position to become the heroes in this story. Too often these companies are viewed as the problem rather than the solution. 

That’s why credit card issuers can and should connect with their cardholders — right now — from those who are struggling with payments and high debt to people who have positive credit histories. 

By doing so they can build a positive relationship with their cardholders, enhance loyalty and mitigate the risks tied to excessive borrowing.

By taking preventative measures to soothe consumer fears, credit card companies can provide timely support, especially in light of people’s concerns over inflation, unemployment, and future economic conditions.

Among the initiatives credit card issuers can take are sending out personal financial education articles, forming partnerships with non-profit credit counseling agencies, and inviting communication rather than waiting for the person to reach out. 

As a growing number of consumers turn to credit cards for cash management, offering healthy products and services will be beneficial to both the financial institution as well as their customers. 

For example, although the Consumer Financial Protection Bureau has been stymied, a card issuer still can make changes that will positively affect their cardholders. A temporary reprieve on late fees or significantly lowering fees would be a valued gesture of goodwill. 

In the case of borrowers with positive established records, increasing a cardholder’s credit limit, lowering the interest rate, and reducing costs associated with cash advances could help a cardholder cover essential expenses.  

Using credit cards as a stopgap measure can quickly transition from relief to “what have I done?” Then, when the cardholder can’t keep up with payments, they panic. 

It’s natural for people to hide their heads in the sand and avoid first contact. In my experience, embarrassment is a driving factor in these situations. Most people are ashamed of their financial problems. 

Credit card issuers can make their cardholders’ lives easier with especially generous hardship programs. If they offer plans with lower or no payments for a few months without extra penalties or credit damage, the cardholder can breathe. 

Making sure people know they can turn to the company during times of stress is important. There should be a “we’re all in this together” attitude because, in truth, we are.