How to Manage Credit Cards When You Face Unemployment |
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by: Janna Weiss
Getting laid off from work is a fear that most Americans share. Sadly, with unemployment statistics growing higher each month, it’s also a scary reality for millions. If you think you might be losing your job, there are some steps you can take to manage your credit cards, avoid high fees, and avoid plunging deeper into debt while you look for a new job.
Save Your Money
Experts acknowledge that many people scurry to pay off their credit cards when their jobs are in peril. But that’s not the recommended course of action. Instead, put your money into an emergency savings account. That way, you’ll have access to funds when you really need them.
Prioritize
Financial experts advise you to put your bills in this order: necessities first, then debt, then luxuries. Sit down and calculate your bills. How much do you spend on simple living expenses each month? Where can you cut back? Many families face tough choices, including getting rid of extra expenses – including credit card payments – so they can keep a roof over their heads and food on the table.
Ask for Help
Right now, tension is high between credit card issuers and cardholders. Even the best customers have watched their credit limits get slashed and their interest rates soar. But that shouldn’t keep you from asking for help, better terms, or even forbearance. If you don’t want to call your card company directly, try calling “Help With My Credit” at (866) 941-1030. You can also ask about your bank’s forbearance policy. A forbearance usually lasts from 3 to 6 months. If you belong to a credit union, it might be worth your time to consolidate your card payments into one low-interest personal loan.
Don’t Jump the Gun
It’s a good idea to start saving money and cutting expenses any time, but don’t call your credit card company to request a forbearance until you’re certain you will lose your job. However, you c an call them any time to request better terms on your existing credit card accounts.
Unemployment is never a pleasant situation to be in. Some people default on their debts out of necessity. Try to come up with a budget that allows you to pay the minimum amount on your credit cards. If that’s simply not doable with your reduced income level, consider the options above.
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