A new research paper 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.

A new study finds that more consumers obtained short-term payment relief on their credit cards during the first 18 months of the pandemic than on any other type of loan except student debt, where forbearances were mandated by federal law. The study also finds evidence that pandemic relief initiatives may have reduced damage to the credit reports of consumers who sought long-term assistance through credit counseling and debt management programs.

This study analyzes five-year credit outcomes for consumers who participate in credit counseling and in some cases enroll in debt management plans (DMPs) using data from a national initiative by the National Foundation for Credit Counseling.