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Covid-19 has greatly impacted the world’s economy. Due to the outbreak of the pandemic, more than 30 million Americans have filed for unemployment. At this juncture, managing personal finances has become intricate. Credit cards can be of great help in accessing instant credit, especially during unpredictable situations like the present Coronavirus pandemic. Therefore, many people have resorted to credit cards to meet this gap between their income and expenses. But is it a good idea? This article will guide you on sensible credit card usage, how to keep your finances in order, and everything you wanted to know about Credit Cards and Covid-19.
What can your lender do for your Credit Card Debt during this Pandemic?
Bank of America, American Express, and every other credit card issuers are offering a relief program for those customers adversely affected by the Covid-19. The policies vary depending on the bank, consumers can contact their respective banks for relief options an explain the financial situations. However, your credit card company can help you with :
- Deferred payments
- Lower minimum payments every month
- Waived late fees or eliminating interest
- Increasing the credit limit to allow for emergency spending when needed
- Cardholders can contact their customer service phone number for financial assistance.
Should I cancel my Credit Card?
The decision to keep or cancel your card is based on your personal preferences. If you have no issues paying your annual fees, it is a wise idea to keep the card and earn the rewards. If you have several credit cards, now its time to downsize it. If you want to cut back on annual fees, consider downgrading your credit card to a no annual fee card instead of canceling it, so you can maintain your credit line.
Should I cancel my Travel Rewards Credit Card now?
It might be difficult to justify paying the annual fee for your travel rewards credit card now due to the travel ban and restrictions. To encourage travel card usage and retention, some major cards have announced new perks:
- Chase has taken a good first step by issuing $100 statement credits toward the Sapphire Reserve’s annual fee.
- You can use your points and miles of Capital One credit card for streaming services and food delivery.
- Amex announces limited-time perks for select Amex Membership Rewards, Delta, Marriott, and Hilton cards.
- Earn up to 5x on groceries across select Chase-issued Travel Cards.
Ultimately, it is your personal choice to keep your travel cards based on your financial situation.
What to do if I have a Credit Card Debt?
If you have a credit card debt, it is essential to talk with your card issuer for Debt Relief Programs. There are four common Credit Card Debt Relief approaches:
- Debt consolidation through a loan or a new credit card.
- Debt consolidation through a debt settlement program.
- Debt management and credit counseling.
Not all of the above approaches fit for everyone. The approaches vary based on financial situations.
Which Credit Card should I use now?
Now it is a great time to go for a Cashback Credit Card. Citi® Double Cash Card, the Chase Freedom Unlimited®, and the Capital One® Savor® Cash Rewards Credit Cards are the best for receiving rewards for everyday spendings. If you already own reward credit cards, you can use the points and miles earned on grocery and food delivery purchases.
- Paying down credit card debt should remain a top priority, so you can avoid high APRs as much as possible.
- Above all, communication is the key- contact your lender for any financial assistance and Debt Relief Programs, this will protect your credit score.