In this week’s Show Me the Money a lot of families are struggling with money during the coronavirus pandemic, especially with so many people out of work. Some will turn to credit cards, but is that a smart idea?
“Credit cards can be a convenient way to pay things down over time but a bill does come at the end of the month and if you’re making significantly less than you used to and you still got bills to pay then you don’t want to be making a late payment or miss a payment because that’s going to do a lot more harm than good.” Greg Mahnken from Credit Card Insider explains the pros and cons of credit cards during the pandemic.
“A lot of people are experiencing unemployment for the very first time and a lot of people have bills they need to pay so would this be a good idea to use a credit card to do that kind of stuff right now?” Mahnken continues,”There’s a few things you can take advantage of…If you have good credit you might still be eligible for a zero% APR offer on a new credit card. You can check to see if you’re pre-qualified before you apply for those types of cards, then you’d be able to pay down your payments over a period of time without paying interest as long as you’re making the minimums.”
Mahnken says always consider the interest because you’ll want to pay as little as possible when it comes to your monthly debt, things like car payments, mortgages, and credit cards. There is also help available.
“Lenders are being a lot more flexible right now and some lenders have already come out with formal plans and processes that they’re applying universally,” Mahnken said.
And it’s always a good idea to reach out to those lenders, “They might be able to postpone some payments, they might be able to waive some late fees, or at least avoid reporting them to your credit report, they might be able to reduce your interest rate temporarily,”‘Mahnken said.
That, of course, happens on a case by case basis but you won’t know unless you reach out and let them know you’re in trouble. When it comes to credit cards Mahnken says the bottom line is don’t spend anything you can’t afford to pay back especially if you’ve lost your source of income.
For more information on what types of assistance credit card companies are offering during the coronavirus pandemic, visit https://www.creditcardinsider.com/blog/credit-card-debt-relief-covid-19-pandemic/