Paying Off Credit Card Debt During Coronavirus

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Last updated on January 31st, 2024

Credit card debt is an issue that affects many of us. As of 2020, the average American has approximately $8,000 in debt. With such high balances, repayment is an essential part of the monthly budget. Since COVID-19 is having such an immense impact on personal finance, however, should Americans continue putting extra money towards their credit card debt during coronavirus?

Debt and Coronavirus – A Dangerous Combination

The difficult decisions that come with credit card debt become even more critical when financial hardships occur. And at few points in recent memory have economic conditions been so chaotic as with the novel coronavirus pandemic.

With rising unemployment each week, and no end in sight for the economic crisis, many Americans must choose between reducing their debts or increasing their emergency funds. Emergency funds help bridge the gap financially when lay-offs, hospital bills, or any other unexpected circumstances arise. Unfortunately, many Americans rely on credit cards as their emergency funding resource, so COVID-19 and credit card debt represents a perfect storm of financial hardship.

Can You Pay Off Debt and Save for Emergencies?

This combination of reduced income, existing credit card debt, and also no emergency funds might seem like a Catch-22. A recent opinion piece in Business Insider discusses why one American is prioritizing paying off their credit card debt instead of building an emergency fund during the coronavirus pandemic. What if there was a better way? Fortunately, some options allow consumers to pay down their credit card balance while saving money at the same time.

The Upgrade Visa® Card with Cash Rewards has grown in popularity significantly since its launch in October of last year. To date, over $500 million in credit has been extended by Upgrade to cardholders.

Upgrade Cash Rewards Visa®

Upgrade Cash Rewards Visa®
Excellent-Good-Fair
BestCards refers to a variation of FICO Score 9, which is one of many different types of credit scores. A financial institution may use a different score when deciding whether to approve you for a credit card. Please note that the range shown here is our own estimation and not a guarantee of credit needed to be approved for any given card. Recommended Credit: Excellent / Good / Fair
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None Annual Fee

Upgrade Cash Rewards Visa®

  • 14.99%-29.99% variable based on creditworthiness and the Prime Rate Regular Purchase APR
  • 14.99% to 29.99% Balance Transfer APR

At a Glance

The Upgrade Cash Rewards Visa® offers no fees, low rates, cash back, and credit lines from $500 to $25,000 in one unique package. The card provides consumers the flexibility and predictability to quickly pay down balances and get debt-free. The Upgrade credit card is one of the lowest regular APR credit cards on the market for those with excellent credit scores, putting it firmly on any list of the best balance transfer credit card deals – or any list of the best credit cards in the U.S.

  • Best Benefits
  • Rates & Fees
  • Why Should You Apply?
  • $200 bonus after opening a Rewards Checking Plus account and making 3 debit card transactions*
  • Earn 1.5% unlimited cash back on card purchases every time you make a payment
  • Combine the flexibility of a credit card with the predictability of a personal loan
  • No annual fee
  • No touch payments with contactless technology built in
  • See if you qualify in minutes without hurting your credit score
  • Great for large purchases with predictable payments you can budget for
  • Mobile app to access your account anytime, anywhere
  • Enjoy peace of mind with $0 Fraud liability
  • *To qualify for the welcome bonus, you must open and fund a new Rewards Checking account and make 3 qualifying debit card transactions from your Rewards Checking account within 60 days of the date the Upgrade Card account is opened. To qualify, debit card transactions must have settled and exclude ATM transactions. Please refer to the applicable Upgrade VISA® Debit Card Agreement and Disclosures for more information. Your Upgrade Card and Rewards Checking account must be open and in good standing to receive a bonus. If you have previously opened a Rewards Checking account or do not open one as part of this application process, you are not eligible for this welcome bonus offer. Welcome bonus offers cannot be combined, substituted, or applied retroactively. The bonus will be applied to your Rewards Checking account as a one-time payout credit within 60 days after the 3rd qualifying card purchase.
  • Regular Purchase APR: 14.99%-29.99% variable based on creditworthiness and the Prime Rate
  • Balance Transfer APR: 14.99% to 29.99%
  • Balance Transfer Transaction Fee: Up to 5%
  • Foreign Transaction Fee: Up to 3%
  • You struggle to pay off your credit card balances
  • You want a structured repayment plan
  • You can reliably pay off your statement balances to earn cash back for your purchases
  • You have a desire to get debt-free quickly
  • You hate penalty or other hidden fees

How Does Upgrade Work?

The Upgrade Card works by extending a credit line of up to $20,000. The card is a hybrid product, working both a Visa credit card and a type of personal loan. Cardholders can use their Upgrade account to transfer their credit line to existing accounts, paying them off to create one balance. In this regard, the Upgrade is akin to a debt consolidation product.

Interest rates with the Upgrade Card start as low as 8.99% variable, and the company offers individual repayment plans, ranging from 12 months to 60 months.  This blend of low APR and convenient repayment plans have been shown to reduce the time – and cost – of paying off debts. Customers simply need to make their minimum monthly payments. This allows them to pay off their credit card debt during coronavirus and save money towards emergency funds at the same time.

Should You Consider a New Credit Card During Coronavirus?

Given the economic climate, it might seem strange to consider applying for a credit card. Right now, however, might be one of the best times to apply for a credit card. That’s because the interest rates at which banks borrow money are historically low. Additionally, banks want to improve their bottom lines to investors, so they may be more willing to extend bigger lines of credit to applicants.

Whether the Upgrade card provides value depends on the unique case for each individual. Those with small debts, or those with poor credit scores, for example, may find better options through balance transfer cards or merely continuing their current repayment plans. These differing needs, in addition to the uncertainty of the current climate, make it vital that consumers carefully consider all options in advance.

Related Article: What Are the Easiest Credit Cards for Bad Credit to Get?

Editorial Disclosure – The opinions expressed on BestCards.com's reviews, articles, and all other content on or relating to the website are solely those of the content’s author(s). These opinions do not reflect those of any card issuer or financial institution, and editorial content on our site has not been reviewed or approved by these entities unless noted otherwise. Further, BestCards.com lists credit card offers that are frequently updated with information believed to be accurate to the best of our team's knowledge. However, please review the information provided directly by the credit card issuer or related financial institution for full details.

About: Cory Santos
Cory Santos

Cory is the senior credit card editor at BestCards, specializing in everything credit card-related. He’s worked extensively with credit cards and other personal finance topics, including nearly five years at BestCards. Cory’s extensive knowledge is an essential part of the BestCards experience, helping readers to live their best financial lives with up-to-date insights and comprehensive coverage of all facets of the credit card space, including market trends, rewards guides, credit advice, and comprehensive credit card reviews.

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