Many with credit card debt may be wondering what to do during the coronavirus pandemic. With plummeting employment, getting out of credit card debt may be harder than ever.
It’s estimated more than 100 million consumers entered the coronavirus outbreak with credit card debt -- 60% of credit card holders carry debt month to month.
“There’s no shame here in having credit card debt. To be honest - most people do,” said Ted Rossman, an industry analyst at creditcards.com.
Those 0% balance transfers are tough to snag these days.
“Banks are definitely getting nervous. They're definitely tightening their lending standards. They’re worried about what’s going on with the economy and job market,” Rossman.
But experts say many credit card companies are willing to work with you.
The average interest rate is 17%.
So experts say: Start there.
Ask your bank to lower it - even temporarily.
And if you need to skip a payment - ask for that too.
“Banks are really stepping up. They’re offering the ability to skip a payment, ideally without interest accruing,” Rossman said.
Experts have always advised consumers to pay off credit card debt. But they say now is not the time. Save any cash you can -- especially those stimulus checks.
“I think it’s really important to preserve cash on hand. There’s really no substitute for money in the bank when it comes to being able to sleep at night and meeting your near term obligations,” Rossman said.
If you’re approached by a company promising to help you eliminate or reduce your credit card debt -- for a fee -- steer clear.
They likely won’t deliver what they promise putting you only deeper in debt.
If you’re feeling financial pressure with your credit cards, a nonprofit group might be able to help. You can find the site here.