In a perfect world, you would be able to pay off your credit card balance in full each month.
Unfortunately, that is not the case for most, and our world is anything but perfect these days. The Coronavirus pandemic has financially impacted everyone. You may be newly unemployed, learning how to navigate furlough, or wondering when you will receive your stimulus check.
On top of the stressful situation of figuring out how to pay for necessities, like food and shelter, some are wondering how to handle their consumer debt at this time. If you find yourself in this situation, here are some ideas on how to best manage your credit card debt
Make the Minimum Payment
The best way to ensure you don’t incur late fees or additional interest is to pay at least the minimum amount due each month. Doing so will keep you in good standing with your lender and the credit bureaus, and help you get out of debt faster than skipping a payment or going into forbearance.
If You Can’t Afford the Minimum Payment
If you find yourself struggling to make the minimum payment, you can always pay what you can. Contact your provider, explain your situation, and offer to pay the amount that you can afford. Many lenders are understanding during this time of hardship and would rather receive a partial payment than none at all. Your provider can provide more details on whether you’ll incur a late fee or additional interest.
Your other option to receive financial assistance is to defer your payment or apply for forbearance. The relief provided by each lender will vary, and you will need to contact them directly to discuss their terms. It’s crucial that you connect with your lender via phone or online. You cannot choose not to pay your balance due to financial hardship and expect any late fees to be forgiven without agreeing to deferment or forbearance terms first. Plus, it’ll hurt your credit if you do. Contact your credit card issuer, explain your situation, and explore your options.
A third option is if you received a stimulus check and do not need to use it for other necessities, put it to good use and make a payment on your credit card.
To learn more about how individuals servicers are handing the COVID-19 crisis, visit the links below:
- American Express
- Bank of America
- Barclays
- Capital One
- Chase
- Citi
- Credit One
- Discover
- HSBC
- Mastercard
- Navy Federal
- PNC Bank
- Truist
- U.S. Bank
- USAA
- Wells Fargo
If You Can Pay More
If you’re someone who finds their financial situation minimally impacted or not impacted at all due to COVID-19, consider yourself fortunate. The best thing you can do right now to manage your credit card debt is to pay the minimum amount and then some if you can. Paying more than the minimum amount will help you get out of debt faster and reduce the amount you pay toward interest. The sooner you get out of debt, the sooner you won’t have to worry about the monthly credit card payment.
The Verdict
Your best option to manage your credit card debt during the Coronavirus pandemic: contact your lender to explore your options and pay something. Whatever you can afford, no matter how small, is better than paying nothing. The benefit of continuing payment in any amount, even if it doesn’t meet the minimum payment, is that it will lower your total balance due. If you opt to defer your payments or go into forbearance, you will still be required to pay your balance once the financial relief period has ended.
Not paying your bill is just that, not paying. Your debt won’t just go away because you’re offered a temporary grace period. Deferring payments and forbearance will not decrease your balance or make it easier once your monthly payments inevitably return. The best option is to continue paying something, so you’re in a better financial position down the road.
