It is important to watch your credit card use especially as the country is trying to get a handle on the Corona Virus pandemic. A lot of countries are affected not only with people getting sick but it also ripples out to the economy as well. As more and more countries on lockdown in a bid to control the spread of the virus, the economy is also taking a big hit.
Once a country or even a state finds the need to go into lockdown, businesses and companies will all close down. The government will make it a point to deliver basic goods and necessities to make sure people still get to live inside their homes. When this happens, you will not be able to go to work and as a result, lose income along the way. This is the reason why CNBC shares that about 67 million Americans would have trouble paying their credit card bills.
There are some exemptions like people who already work from home, to begin with. Some employers also make it a point that they get to take care of their people during the pandemic. There are those who would still release their salary and even provide some extra assistance on top of that. However, not everyone is immune to the financial pinch that the Covid19 brings.
As your income is affected, you now start to think of ways to make sure you still meet your financial obligations. Apart from spending for basic necessities in life, you also have a number of debt payments you need to address every month. It can be anything from a mortgage loan, student loans, and especially credit card debt.
Start to prioritize your payments
You need to watch your credit card use during the pandemic and this starts from making sure that you are able to prioritize your expenses first. On top of your list are the essentials that you cannot do without such as food and other basic necessities in life. This should also include having a roof over your head so your mortgage or rent is important.
After this, you need to start prioritizing your payments to make sure that you have enough for your basic needs until everything goes back to normal. It can be as short as a 24-hour lockdown to help the government stop the spread of the virus or longer. The idea is to make sure you have a priority of what you need to spend on.
Watch your credit card use with a streamlined budget
It is important that when you start talking about your credit card use, you need to look at your budget as well. Now that you an idea of what your priorities are, you can begin to streamline your budget to help you save money and stretch what you have to cover unexpected emergencies in light of the Corona Virus pandemic gripping the nation.
With your basic goods as a priority, you need to keep your credit card use to a minimum when it comes to your wants in life. You can also do a thorough review of your credit card statements you receive at the end of the month. One way to streamline your budget is to cut-off expenses you can do away for the meantime.
This can be a gym membership you can put off for the meantime. There are ways you can exercise at home on your own without spending for a gym membership. You might also be paying for multiple streaming services and can make do with just a few at home. The idea is to either do away or lower down some expenses you have in your card to help you save money and streamline your budget.
Use a card with the lowest interest rate
It is important to watch your credit card use to help you manage your payments at the end of the month. It will be a lot more difficult in the coming months with the COVID19 pandemic. A lot of economies are struggling and several industries are trying to stay afloat. The sad part is that a lot of Americans are affected by this where their income is affected.
As you use your credit card to pay for essential expenses, make it a conscious effort to use the card with the lowest interest rate. This can help you save money especially when you are forced to settle paying the minimum amount at the end of the month. Once interest payments kick in, it will not be as steep as your other high-interest cards.
Another benefit this can give is you is the fact that it would be a lot easier managing your credit card use if you monitoring only one card. You only have to go through one statement at the end of the month and pay only one lender. Choosing to use your one card with the lowest interest rate can help you manage your finances better.
Consolidate into a 0% card
In order to help you watch your credit card use, you can also consider consolidating your existing credit card debt into a 0% card. This can be a new application meant only to help you consolidate your balances across different credit cards you have. There is a good chance that you have more than one credit card under y our name. Value Penguin shares that Americans have more than 2 credit cards on average with them.
One thing you need to remember when using a 0% card is that most lenders offer this but with a limited promo period. It can be anywhere from 6 months even up to 21 months and your goal is to pay off the balance before that promo period comes around. If not, you could be making high monthly payments just like before.
You also need to make sure that you get a good grasp of your impulsive buying behavior after you consolidate your debts. The reason for this is that when you realize that your credit cards are all carrying a $0 balance, you could be tempted to purchase again. Make sure to keep your cards safe from unnecessary purchases.
Make minimum payments
As you aim to watch your credit card use, you might come across instances when finances become a little bit tighter than you expect. It can be prolonged periods of time where you do not have work or your income is severely impacted by a slow economy. Even with these situations in front of you, you still need to spend even for your basic needs using your credit cards.
It is during these times that you can choose to pay only the minimum amount on your credit card. Doing so will help your account stay current and up to date. Add the fact that minimum payments on a card is normally just a small amount of your total payment due. This can help you cope and re-allocate your funds to expenses higher up in your priority list. Just know that the lender could start charging you interest and other fees in your account.
It is important to watch your credit card use as the coronavirus sweeps through the nation putting several industries at risk. As developments about the pandemic are being monitored on a daily basis, it is important that you manage your finances tightly over the next few months.