Credit Card Tips During a Crisis
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A crisis can have a hugely disruptive effect on our lives. It can have an even bigger effect on our finances.
Financial guru Suze Orman recommends that in a crisis, using your credit card to pay a bill is if you are having a hard time financially is best, rather than depleting your savings.
“If you don’t have enough monthly income to pay your essential bills, I would rather you use your credit card rather than dip into emergency savings,” Orman said.
Related: What to Know About the Economic Impact Payments (EIP) Stimulus Check
Orman recommends only paying the minimum payment due on your credit card, giving you more money to put into savings to increase your cash on hand.
She also mentions using every credit card, including any that are saved for an emergency. During challenging times, banks often lower credit card limits and sometimes, even cancel cards for those who aren’t actively in use. Using the cards a few times monthly for essential purchases will reduce the chances of those accounts getting canceled.
Related: How to Create an Emergency Fund
Calling your credit card companies and asking for a lower Annual Percentage Rate is also the way to go, according to Orman. It is a good idea to see if you can get a zero percent balance transfer rate on any existing cards that you might have. Some lenders will have special programs and it’s best to shop around to see what transfers are available.
With a bit of financial planning and using existing resources, it is possible to keep your savings safe and for your credit cards to help you when you need them.
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