What to Do With Your Credit Cards Now
During uncertain economic times, people react in various ways. Some people shift into extreme frugality mode, and shut down all non-essential spending. Some people might want to comfort themselves by splurging on a few fun things or big purchases. Whatever your situation, if you have already lost your job, had your work hours cut, or even if you’re still working full-time but feel uncertain about your job security, this is a good occasion to cut down on your spending.
Depending on how much credit card debt you have, there are a few possible steps to improve your financial situation.
No Credit Card Debt
Even if you have zero credit card debt, this uncertain economic situation is a good time to avoid putting more purchases on your credit card. Don’t use your credit card right now unless you are earning rewards points and you have a plan to pay off your balance on time, without incurring interest charges or late fees.
Some Credit Card Debt, Not Delinquent
If you are carrying a balance on your credit cards, but are current on your payments and your job is still going on as usual, you can keep using your card as usual. Even if you feel good about your job security, this could be a good opportunity to; stop putting additional purchases on the card until you’ve paid off your balance in full.
If your job situation is uncertain or money is tight, you might want to consider a few months of making only the minimum payment on your credit card. This will cause you to rack up additional interest charges, but making the minimum payment will help you conserve cash while also preventing your credit score from taking a hit. Another option is to consider a 0% APR credit card for a balance transfer.
Try to avoid a situation where you fail to make the minimum payment on time, because this can hurt your credit score and lead to other problems in your finances.