Managing Debt During COVID-19
The COVID-19 outbreak has impacted us all in one way or another. Whether you are working from home, have reduced hours, or lost your job altogether. This is an especially difficult for some people to keep up with their debts (mortgage, credit card, student/auto loans). Here are some tips to stay afloat and manage your credit card debt as much as you can:
Credit card issuers, like Capital One, Chase, Citi and U.S. Bank, and Wells Fargo, have released statements on their websites announcing that they’ll offer different kinds of help during the COVID-19 outbreak, such as giving credit line increases and providing increased fraud protection.
*But be careful about increasing your credit line. While, yes, it might help your credit score if you don’t use it (because your utilization ratio would go down), if you start to charge more on your credit card after getting the increase, it could be very difficult to dig yourself out of that debt.*
So try not to use your credit card as a crutch during this time- yes I know it is SO hard. But trust me, you won’t regret it in the long run. Instead of racking up more debt, you might consider asking for a:
Collection forbearance (a temporary amount of time during which you don’t have to make payments, though interest might still accrue so watch out)
Different payment option (like a lower minimum payment)
Lower interest rate
Payment deadline extension
Waiver of late charges
Apple Card and Barclays, are letting cardholders skip their March payment without incurring interest charges or other fees. Contact your card issuer by phone, online, or its app to find out what options are available.
To avoid hurting your credit in the meantime, try to make at least the minimum payment on your credit card accounts on time, or pay the amount you and creditor have agreed upon. You can also ask the card issuer not to report your delinquency to the credit bureaus during this crisis.
Finally, don’t panic. Remember, we’re all in this together, the more we can lean on one another for support, the easier it will be to get through this time. I’m rooting for you!!
Register for our upcoming webinar, Debt: the good, the bad and the ugly on Tuesday, March 24, 6pm ET to learn more from Sarah Halwani.