Are you also facing a financial crisis? Let us tell you that you are not the only person. Following the outbreak of the COVID-19, every individual out there is facing the same hardship. In such a situation, it is really difficult to afford various expenses including credit card bill payments. Credit card bills are a huge expense, particularly when you are dealing with a loss of income.
Needless to say, a little flexibility can significantly help you adjust the money management ways, at least in the short term. When everything will be back to normal, you can change your strategy once again.
Here are some effective tips that will help you:
Ask For a Help–
In this difficult time, every sector is offering help/assistance to their customers. And credit card issuers are no exception. They are providing various assistance such as deferred payments and fees.
So, you can reach out to your issuer & ask for such help. There are numerous credit card hardship programs that can be acquired for longer-term help, again upon request. However, such programs usually come with certain drawbacks such as the freezing or closure of the account, or a cut down in credit limit.
Also Read: Safest Way To Cancel Your Credit Card
Turn off Autopay
One of the easiest ways to prevent late fees is to set up credit card auto payments. However, this feature can lower your checking account balance that in turn leads to various drawbacks.
If you want to avoid potential overdraft fees, you can tweak or shut off any scheduled credit card auto payments.
Also, you can adjust autopay to cover the minimum payment alone and manually pay more if your budget lets or simply make manual payments for now.
Budget Adjustments
We are sure your spending habits have been shifted during this crisis— less dining out, entertainment, and travel, however, more groceries and streaming services.
All you need to do is check your budget or glance at credit card & bank statements going back a few months. Now, figure out all those expenses that you can trim. It can be that subscriptions or memberships you no longer use or consider downgrading a credit card to a no-annual-fee version to keep an old account active at a lower cost.
When To Use Credit Cards?
By design, our credit cards allow us to purchase something right now and pay for it later. Charging up to your credit limit even if you still owe a balance from last month is usually something most of us do. However, during difficult times, certain traditional credit card rules do not always apply.
Also Read: Never Pay For These Items With Your Credit Card
Keep the following factors in your mind:
- Again, Ask For A Help
Just give a call to your landlord, utility companies, and other service providers to tell your financial situation. No matter if it is extending due dates or waiving late fees, you will definitely have various creditors to work with you. There are many who are offering their own hardship programs. Invest some time and discover them!
- Weigh the convenience fee
Utility companies, daycares as well as rent payment services often charge people extra for using a credit card as their payment method. However, if you require a few extra time to create your checking account balance, a 2 percent fee can be worth that convenience in the short term, which will allow you to charge the bill on its due date & pay the balance down soon after (ideally before any interest accrues).
Easy Ways To Save On Interest
Credit cards are offering 0 percent interest on whole new purchases or balance transfers may buy you quite a bit of time before interest starts to accrue (normally a year or more).
And if you are carrying any debt on another card, or you anticipate any big purchase in the near future, then you can consider such types of cards. But:
- The person should have good or excellent credit to be eligible (FICO scores of at least 690).
- Some balance transfer cards charge a fee, normally 3-5 percent of the transferred balance (there are various options without these fees/charges).
- Once the promotional no-interest period expires, then you will owe interest on any remaining balance.
These loans should be used to consolidate numerous debts into one monthly payment, generally at a lower interest rate.
Again, you can avail numerous loan options only if you have good to excellent credit. Don’t worry, there are loan options designed for consumers with lower credit scores.
So, consider the aforementioned points and smartly manage your credit payment during this global pandemic.
Also Read : Four Best Personal Loans For Bad Credit In 2020