2 min read
A person using a credit card.

A lot of families and individuals are having to make tough decisions concerning putting charges on their credit cards because of the interruptions resulting from the coronavirus (COVID-19 outbreak). In a normal situation, consumers are advised not to use their credit cards unless it is absolutely necessary.

In this national crisis and if consumers have no savings or other ways to make purchases or pay bills, they may consider using their credit cards. Some consumers have no choice but to do the next best thing, even if that means using a credit card. Before deciding to use credit cards, develop a plan for how to repay the newly created debt and avoid having a financial disaster later.

Consumers should consider the following before using credit cards.

Contact the credit card issuer and inform the company about your current financial situation. It could be that you lost income due to being quarantined in the hospital or you have to stay home and not go to work.

Caution! Don’t skip making your minimum payments required by the credit card company without first asking about programs it may have to accommodate consumers facing a national crisis. Be proactive and honest with an account representative on the front end rather than waiting until you are in financial trouble. Let them know that you can’t afford to make your minimum payments or a payment at all.

If you contact the credit company of a financial hardship before they contact you for late payment, it may be possible to postpone your payments. However, make sure you know up front if the company will or will not eliminate the late fees, add additional interest during the time when payments are suspended, and if they will waiver additional interest and late fees.

Another option may be to borrow money from a loved one, family friend, or close neighbor who may be able to financially assist you. This may prevent you from destroying your credit if you are in the process of rebuilding it.

You may also consider reaching out to a community resource by calling 211 or contacting your place of worship for assistance if you need food and supplies and don’t have money to buy them.

It is not uncommon for individuals to be in this situation during a crisis. There is no need to live in fear. Sometimes people have to make drastic financial decisions to care for their household, but resources are available to help.

If all else fails and you have to use your credit card, seek the assistance of a nonprofit credit counseling service to help you get back on track.

For more information, contact Theresa Jones, regional Extension agent in human sciences, at rosscth@aces.edu.

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