Credit cards are of great help to access instant credit or to adjust the short-term liquidity mismatches in uncertain times.
However, in the Covid 19 situation, with people trying hard to make the ends meet and you fail to make on time payments, credit card debts can add up, leading to financial challenges.
Here are a few tips to manage credit cards in this pandemic.
Never Ignore the Bill
Well, probably you have not used your credit card during the lockdown, or less as compared to the normal time.
We understand that it is quite tempting to simply ignore the bill and avoid the trouble of making the payment now.
Even if the amount to be paid looks negligible, do not give in to the temptation of avoiding the payment, as that will be a blunder.
Delaying credit card payments will increase your liabilities, as you will be charged an amount as interest for every month of delay.
The interest rate on credit cards can be quite high, and in the long term may prove to be an unnecessary outgo.
Keep checking your credit card as you do usually, and pay the outstanding amount as soon as you can.
Use the Credit Card Relief Programs
If you think you will not be able to make the payment on time, do not worry. There are ways you can handle the situation.
Amidst this pandemic situation, most credit card issuers are waiving payments or interest and fees for the cardholders who are trying hard to make the ends meet. In short, different types of financial relief is made available for the customers impacted by Covid 19.
To take advantage of a relief program, the very first thing that you need to do is, contact your provider. Next, request for financial assistance.
Use Your Emergency Savings
Experts recommend having emergency savings that can cover three to six months of expenses.
If you lose your job in the pandemic, you can use that fund to pay for the necessities.
You can also use the emergency fund to pay off your credit card bill, at least the minimum amount. Do not drain this fund to clear all your debt aggressively. We have no idea how long we have to go through this untoward situation. So, it is prudent to preserve and use the money only after careful consideration.
Budget your Money
Make a plan before spending your funds.
Avoid buying things you do not need.
With the lockdown easing and shops opening, you might feel the urge of indulging into shopping.
It is easy to shop using a credit card, but it can create a serious dent in finances.
With most of us working from home, much of the shopping is done online. Make sure you do not get carried away just because you are armed with a credit card.
Stay in your budget and avoid purchasing any luxury item now.
Credit cards are necessary today, but you must handle them with caution. You need to make the minimum payment to maintain your current account though it may get waived through a forbearance program. As soon as you are in a more financially stable condition, clear your credit card bill.