Last updated on November 3rd, 2020
The coronavirus pandemic is having far-reaching effects of Americans. Not only is the virus devastating communities, but it is also playing havoc on the personal finances of Americans. According to recent studies, debt is at an all-time high, with credit card debt growing almost 40% in March alone. Fortunately, there are steps you can take to improve your finances. Here’s how to manage credit card payments during the coronavirus (COVID-19).
Ask Your Bank for Assistance on Credit Card Payments
The first thing to do is to contact your lender about forbearance or payment assistance. Most banks are currently offering relief from credit card payments during the coronavirus pandemic. Calling the issuers of your credit cards can help you eliminate payments for the month or offer a reduction in charges.
Related Article: Updated Coronavirus Credit Card Relief Contact Information
Reduce Your Spending
Managing your budget is a proactive step that can help improve your finances significantly. Reducing the amount of spending you do on your credit cards is a great way to minimize payments in the future. Of course, lowering your card usage isn’t ideal for everyone – especially those finding themselves out of work. Still, many people will be surprised at how expenditures on things like streaming services and fast food can quickly add up.
Pay Attention to the Fees
Credit cards should be your last recourse for paying bills, but they may provide some breathing room in the short term. If you need to pay a bill, such as the electricity, pay close attention to any additional fees that may be charged as a result of paying with a credit card. Some utility companies charge what is known as a convenience fee of around 2% for paying with a card. Carefully weigh these charges versus your ability to pay with your savings or checking account.
Similarly, if you switch off auto-pay to avoid becoming overdrawn on your checking account, pay close attention to the late charges your cards charge. It is never advisable to miss card payments, so contacting your lender for relief is essential. That said, you can also adjust any automatic payment features on your cards to pay the minimum, instead of the full statement balance. This can save you money for other expenses in the short-term.
Consider Refinancing Your Credit Card Debt
Debt refinancing or consolidation is a great way to reduce your debt burden during COVID-19. There are a substantial number of reputable debt refinance and support companies that specialize in helping Americans struggling with high monthly payments. Groups like American Debt Enders are great for helping people find solutions for too much debt to find answers quickly.
Consolidating debt is also achievable through products like the Upgrade Card. Upgrade works by providing a credit line of up to $20,000 through their Visa card. Cardholders can then use that line to pay off existing debts, consolidating them into one payment. That new balance then transfers into an installment payment plan of up to 60 months. Thanks to rates as low as 6.99%, this process can save consumers tens-of-thousands of dollars versus traditional repayment methods.
Personal loans are another option for reducing your monthly payments. Many personal loans, like those from OppLoans, Smarter Loans, and Even Financial, are easy to apply for and offer decisions in minutes. They also usually provide quick turnaround times, meaning the funds can be in your bank account within a day or two. In some cases, the money clears the same day of the decision.
Summing It Up
The COVID-19 pandemic is devastating the personal finances of millions of Americans. Fortunately, there are proactive steps you can take to ensure you keep your head above water financially. The most important things you can do if you have concerns about your ability to pay your credit cards is to contact your lenders about repayment options and examining your budget to see where you can create savings.
Related Article: 5 Tips to Manage Your Finances After Losing Your Job