Optional payment security program
Cost is just $1.66 per $100 of the ending balance on your Synchrony account each month.
Customer testimonials
“I love it. It’s fast, and I recommend to other people to always have a Payment Security service, because you never know when you’re going to need it.”
– Payment Security customer who received $1,033 of coverage due to a leave of absence
“I have the comfort of knowing I paid monthly for something that truly was beneficial and brought complete peace of mind, especially due to no longer working due to health.”
– Payment Security customer who received $1,333 of coverage due to hospitalization
“Very helpful when you are disabled. Takes so much stress off you. Easy for me to fill out forms and easy for doctor to complete.”
– Payment Security customer who received $2,181 of coverage due to disability
FAQ
Have questions? We have answers.
What events are covered by Payment Security?
There are seven events covered by the optional Payment Security program:
- Involuntary unemployment — You lose your job due to a general strike, layoff or unionized labor dispute, or you are terminated due to no fault of your own.
- Leave of absence — You are on an unpaid employer-approved leave of absence from your full-time job.
- Disability — You are unable to perform normal daily activities and require the care of a doctor due to sickness or injury.
- Hospitalization — You are admitted to a hospital and are under the care of a doctor.
- Nursing home care — You are admitted to a nursing home and are under the care of a doctor.
- Terminal illness — A doctor diagnoses you with a medical condition that is expected to cause your death in six months or less.
- Loss of life — The covered person passes away.
Restrictions apply. For complete details and exclusions, please see the Payment Security Debt Cancellation Program Agreement.
How could I benefit from Payment Security if I lose my job?
If you are employed in a full-time, non-seasonal job, the optional Payment Security program can provide the following benefits:
- Cancellation of your Synchrony credit card minimum payment for one to six months, depending on the covered event and the time period involved.
- Cancellation of the balance on your Synchrony credit card account, up to $10,000.
For complete details and exclusions, please see the Payment Security Debt Cancellation Program Agreement.
Can Payment Security benefit me if I am self-employed, work part-time or only work seasonally?
Yes. You would still be eligible for up to six months of minimum monthly payment cancellations on your Synchrony account. You would not be eligible for balance cancellation.
How soon would I be eligible for a benefit under Payment Security?
Any Covered Event would need to begin after you have purchased Payment Security. After that, eligibility depends on which qualifying event you experience.
- Disability, hospitalization, nursing home care, terminal illness and loss of life protection begins on your enrollment Effective Date (the date your coverage begins).
- Job loss and leave of absence protection begins 30 days after your Effective Date.
What if I experience two Covered Events at once?
If both Covered Events have the same Benefit Start Date, you will need to choose just one of the events to file for benefits.
How do I file a benefit request?
If you experience a Covered Event, the primary or joint Synchrony credit card account holder should follow the steps below:
- Call (800) 815-4051 (9:00 a.m. to 10:00 p.m. Eastern Time, Monday through Friday and 9:00 a.m. to 6:00 p.m. Eastern Time, Saturday, except holidays) OR write to Payment Security, P.O. Box 740237, Atlanta, GA 30374-0237 to ask for a Benefit Request Form.
- Complete and return the form with requested documents within one (1) year of the Benefit Start Date.
Can I stop making my monthly Synchrony credit card payment as soon as I experience a qualifying event?
No. After a Covered Event occurs, you must continue to make any required minimum payments on your Synchrony credit card account until you are notified that your benefit request is approved.
How much does Payment Security cost?
The optional Payment Security program costs $1.66 for every $100 of the ending balance on your Synchrony account each month.
Example
| Monthly ending balance | $500 |
| Calculation | $500 balance ÷ $100 = $5 |
| Monthly fee | $1.66 × 5 = $8.30 |
I have more than one Synchrony credit card account. Do I need separate Payment Security coverage for each one?
Yes. You would need to purchase a separate Payment Security credit card protection plan for each of your Synchrony credit card accounts.
If I pay my Synchrony credit card balance in full each month, will I still be charged for Payment Security?
Yes. If you purchase the optional Payment Security program, you will be charged for any month where you have a statement balance on your Synchrony account, even if you pay that balance in full.
If I’m not using my Synchrony credit card and have no balance on my account, will I still be charged for Payment Security?
No. If you do not have a statement balance, you will not be charged the Payment Security fee for that month.
How can I cancel my Payment Security coverage?
You may cancel at any time. If you cancel within 90 days of your enrollment Effective Date, you will receive a refund of any program fees you may have been charged. To cancel, call (800) 815-4051 (9:00 a.m. to 10:00 p.m. Eastern Time, Monday through Friday and 9:00 a.m. to 6:00 p.m. Eastern Time, Saturday, except holidays) OR write to Payment Security, P.O. Box 740237, Atlanta, GA 30374-0237.
*Certain exclusions and eligibility requirements apply. Go back
What Is Debt Cancellation?
Debt cancellation is when a lender agrees to relieve you of your obligation to repay your debt. When a creditor cancels a debt, you no longer have to pay what you owed. However, you may face a tax bill and potential damage to your credit score.
Debt cancellation occurs when a lender forgives some or all of an amount that you owe. But depending on the type of debt and the reason for discharge, you may still face certain consequences. Here’s what you need to know about what happens with canceled debt and how to prepare yourself.
What Is Cancellation of Debt?
When you take out a loan, you typically agree to pay it back in full. But in certain situations, the lender may opt to forgive some or all of the debt.
When this happens, you’re no longer on the hook for the canceled amount, and you don’t have to worry about the lender trying to collect again in the future. That doesn’t mean there aren’t any consequences, however.
How Debt Cancellation Works
There are a handful of situations where a lender may choose or be forced to cancel a debt.
Bankruptcy
When you file for bankruptcy, you’re indicating that you can no longer afford to repay your debts. You’ll work with a court to either liquidate your assets to repay what you can or get on a restructured payment plan. Whatever debt is left over is typically discharged by the bankruptcy court.
While bankruptcy can provide some relief, it can also severely damage your credit scores for many years to come.
Debt Settlement
If you’re behind on payments, a lender or debt collector may be willing to accept a debt settlement in which you pay less than what you owe to satisfy the debt. Once you pay the agreed-upon settlement amount—usually with a lump-sum payment—the remaining debt is canceled.
Like bankruptcy, debt settlement can give you some relief amidst financial hardship, but it can have a drastic effect on your credit score.
Student Loan Forgiveness
The federal government offers several student loan forgiveness programs to provide relief for eligible student loan borrowers. In particular, the following federal loan borrowers may qualify for cancellation of their debt:
- Teachers
- Government employees
- Nonprofit employees
- Borrowers with disabilities
- Deceased borrowers
- Borrowers on an income-driven repayment plan
- Borrowers who have been defrauded
Credit Insurance
For some types of debt, including mortgage loans, auto loans, personal loans and credit cards, you may be able to purchase credit insurance from the lender.
Depending on the type of insurance you buy, the lender may cancel some or all of your debt if you pass away, become disabled or lose your job involuntarily. That said, credit insurance can be expensive, and disability and unemployment insurance may only cover a limited number of payments.
Charge-Off
If a lender has given up on collecting a debt, it may opt to charge off the balance, effectively canceling the debt.
This can also occur when a lender forecloses on a home or repossesses a vehicle, but the sales proceeds aren’t enough to cover the remaining balance. While lenders will typically try to collect the deficiency balance from you, they may opt to charge off the debt if you’re unable to pay.
How Does Cancellation of Debt Affect Taxes?
The IRS considers most forms of forgiven, canceled or settled debt as income for tax purposes. If the amount of your canceled debt is more than $600 and it’s considered taxable, the lender is required to send you a 1099-C form, which includes the canceled amount that you’ll need to report.
If your forgiven debt is less than $600, you might not get a 1099-C, but you’ll still need to report it on your tax return.
Depending on how much debt has been discharged and your current tax situation, a canceled debt could result in a massive tax bill. If you’ve recently taken advantage of a debt forgiveness program, you’ll want to find out whether the amount forgiven is taxable and how to prepare so you don’t get blindsided at tax time.
Exceptions to Debt Cancellation Taxes
While most canceled debt is considered taxable income, there are some exceptions to the rule, including:
- Bankruptcy: If your debt was discharged in bankruptcy, it’s not considered taxable income. The thought is that you’re already hurting financially, and requiring you to pay taxes could make things even more difficult.
- Insolvency: If you’re financially broke at the time of the cancellation—your liabilities exceed your assets—you may be able to exclude some or all of your canceled debt from your income on your tax return. The IRS determines how much you can exclude based on the extent of your financial insolvency.
- Gifts: If you borrowed money from your parents or a friend and they decided not to collect the full amount from you, that’s considered a gift for tax purposes.
- Tax-deductible interest: If you’ve had a business or mortgage loan canceled, where the interest was considered tax-deductible, you won’t need to report the interest portion of the forgiven amount as income. You will, however, still need to report the canceled principal amount.
- Certain student loans: Through 2025, most forms of federal student loan forgiveness aren’t taxable on the federal level. However, some states may still require you to report certain types of federal loan forgiveness as income.
- Farm or real estate debt: If your debt was attached to a farm or real estate business and you meet other eligibility requirements from the IRS, you may qualify for a special exclusion.
How Does Cancellation of Debt Affect Your Credit?
Cancellation through federal student loan forgiveness or credit insurance could have a slight impact on your credit score through paying off the loan and closing the account. However, if you obtained forgiveness due to bankruptcy, debt settlement or a charge-off, you can expect your credit to take a significant hit.
That’s because your payment history is the most influential factor in determining your credit score, and those types of debt cancellation are an indicator that you failed to pay as originally agreed.
With debt settlement and charge-offs, for instance, the derogatory mark will typically remain on your credit reports for seven years from your original delinquency date. With bankruptcy, the public record will stay on your credit reports for up to 10 years.
That said, these negative effects can diminish over time, especially if you take steps to rebuild your credit history.
How to Remove Canceled Debt From Your Credit Report
In general, you can’t get discharged debt removed from your credit report unless the information is inaccurate. In that case, you have the right to file a dispute with the credit reporting agencies.
However, you might consider writing a letter to the creditor requesting a goodwill deletion, especially if you did everything in your power to pay what you could.
Just keep in mind that there’s no guarantee the creditor will grant your request. If you can’t get a negative account removed from your credit reports, it’ll typically remain for seven years from the original delinquency date.
The Bottom Line
While debt cancellation may seem like a freebie, that’s not always the case. Outside of federal student loan forgiveness programs and credit insurance, forgiven debt may be subject to taxes and cause significant damage to your credit.
If you’re currently seeking debt cancellation through bankruptcy, debt settlement or a charge-off, research all of your options and carefully weigh both the advantages and disadvantages of each to determine the best course of action for you.
Also, be sure to monitor your credit score throughout the process to understand how canceled debt can affect your credit health and determine which steps you can take to improve your credit score over time.
Find out what debts you owe
Your free credit report lists all your debts, such as credit card balances and loans, helping you create a plan to tackle your debt and improve your financial health.
About the author
Ben Luthi has worked in financial planning, banking and auto finance, and writes about all aspects of money. His work has appeared in Time, Success, USA Today, Credit Karma, NerdWallet, Wirecutter and more.
Explore more topics
Share article
Experian is a globally recognized financial leader, committed to being a Big Financial Friend—empowering millions to take control of their finances through expert guidance and innovative tools. As a trusted platform for money management, credit education, and identity protection, our mission is to bring Financial Power to All™.
- Security freeze
- Fraud alert
- Disputes
- Denied credit
- Identity theft victim assistance
- Active duty military
- Opt out of prescreen offers
- Upload a document to Experian
- Credit report & scores
- Fraud & identity theft
- Banking
- Credit cards
- Loans
- Insurance
- Mortgage
- Investing
- Personal finance
- News & research
- Free credit monitoring
- 3-bureau reports & FICO ® Scores
- Check credit
- Improve credit
- Establish credit
- Experian CreditLock
- Annual credit report
Experian’s Diversity, Equity and Inclusion
Data privacy
- Legal terms & conditions
- Privacy center
- U.S. data privacy policy
- Press
- Ad choices
- Careers
- Investor relations
- Contact us
To view important disclosures about the Experian Smart Money™ Digital Checking Account & Debit Card, visit experian.com/legal.
The Experian Smart Money™ Debit Card is issued by Community Federal Savings Bank (CFSB), pursuant to a license from Mastercard International. Banking services provided by CFSB, Member FDIC. Experian is a Program Manager, not a bank.
Θ Credit score calculated based on FICO ® Score 8 model. Your lender or insurer may use a different FICO ® Score than FICO ® Score 8, or another type of credit score altogether. Learn more.
Editorial Policy: The information contained in Ask Experian is for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding any legal issues. Please understand that Experian policies change over time. Posts reflect Experian policy at the time of writing. While maintained for your information, archived posts may not reflect current Experian policy.
Opinions expressed here are author’s alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities, unless sponsorship is explicitly indicated. All information, including rates and fees, are accurate as of the date of publication and are updated as provided by our partners. Some of the offers on this page may not be available through our website.
Offer pros and cons are determined by our editorial team, based on independent research. The banks, lenders, and credit card companies are not responsible for any content posted on this site and do not endorse or guarantee any reviews.
Advertiser Disclosure: The offers that appear on this site are from third party companies (“our partners”) from which Experian Consumer Services receives compensation. This compensation may impact how, where, and in what order the products appear on this site. The offers on the site do not represent all available financial services, companies, or products.
*For complete information, see the offer terms and conditions on the issuer or partner’s website. Once you click apply you will be directed to the issuer or partner’s website where you may review the terms and conditions of the offer before applying. We show a summary, not the full legal terms – and before applying you should understand the full terms of the offer as stated by the issuer or partner itself. While Experian Consumer Services uses reasonable efforts to present the most accurate information, all offer information is presented without warranty.
© 2025 Experian. All rights reserved.
Experian and the Experian trademarks used herein are trademarks or registered trademarks of Experian and its affiliates. The use of any other trade name, copyright, or trademark is for identification and reference purposes only and does not imply any association with the copyright or trademark holder of their product or brand. Other product and company names mentioned herein are the property of their respective owners. Licenses and Disclosures.
https://www.synchrony.com/consumer-resources/synchrony-payment-securityhttps://www.experian.com/blogs/ask-experian/what-happens-with-canceled-debt/
