Tips On Tackling Credit Card Debt During Coronavirus Pandemic

Jennifer Keiper
April 01, 2020 - 10:37 am

CHICAGO (WBBM NEWSRADIO) -- If you’ve been ringing up the credit cards, you’re not alone. Credit debt among Americans was pretty high heading into the coronavirus outbreak, and one expert said lenders are concerned, as more of us stay at home or even get laid-off.

A survey finds that over 110 million people in the U.S. carried credit card debt into the coronavirus outbreak. Nearly half of those surveyed with credit cards were stressed out about their debt at the time the pandemic ramped up in the U.S. That included 13 percent who were very stressed, according to creditcards.com. Now with layoffs on the rise and pay cuts, industry analyst Tedd Rossman said if your debt is rising quickly, call your credit card company soon and be honest. 

"Lost your job, having trouble with your bills, can the issuer work with you? Can they maybe, rearrange your payment date, ideally without interest? Can they waive other fees? They have these hardship programs for other things, too, like natural disasters and job losses, and it very much pertains to the coronavirus pandemic," he said.

If you find you are in too deep, Rossman said you ask about a payment relief program, or Rossman suggests a 0 percent balance transfer card.

"A great way to pause the interest clock for up to 21 months - it's still a great idea if you can qualify. Lenders have really tightened their standards recently. If you have a credit score in the 700s or 800s and a stready job, there's a good chance you will qualify," he said.

He said personal loan debt consolidations might be another option to save money and alleviate stress.

Rossman added the COVID-19 outbreak is unfortunate proof that circumstances can change in an instant, and what many believed was manageable debt has suddenly turned into a situation of uncertainty.  

“Issuers are definitely nervous.  Just in the past couple of weeks, we’ve seen lending standards tighten.  Card companies are worried about what all this means for the economy and the job market,” said Rossman.

Also, Rossman said to keep in mind as you spend that credit card rates remain very high, over 17-percent for many cardholders, and Federal Reserve interest rate cuts haven’t provided much relief.