Many Americans struggled during the pandemic to meet their credit card requirements.
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Amid one of the worst declines in U.S. history, nearly 80% of credit card holders say they are afraid they will not be able to continue even the minimum payments on their debt.
The figure comes from a survey by CreditCards.com, which found that millennial card holders (91%) are most at risk for missing payments. Meanwhile, 1 in 4 people say the pandemic has prompted them to take on more credit card debt.
Most of the relief measures provided to Americans in the first incentive package have been curtailed, even if the coronavirus pandemic shows no sign of diminishing. The unemployment rate is still above 10%, higher than at any point during the Great Recession.
More than 60% of respondents to the survey said they may not be able to make their minimum payments if they are unable to return to work. “It’s hard news to hear,” said Ted Rossman, an analyst at CreditCards.com.
Publishers have responded to the pandemic by creating programs to help customers at this time.
Julie Sherrier
senior managing editor at LendingTree
The average U.S. household has around $ 5,700 in credit card debt, with a minimum payment of around $ 133, Rossman said.
Depending on your situation, you may not be able to access any of your credit cards at this time. Your hair or mortgage may need to come first.
“If it’s a house, you could lose the roof over your head,” said Bruce McClary, a spokesman for the National Foundation for Credit Counseling.
However, if you do not believe that you can make a minimal payment on a credit card, your first move should be to reach out to your issuer, said Julie Sherrier, senior managing editor at LendingTree. (The issuer’s phone number is often located on the back of your card.)
“Publishers have responded to the pandemic by creating programs to help customers during this time,” Sherrier said. “However, it is up to the customer to reach out and ask for help.”
Apple Card enables certain consumers to postpone payments without reaching interest rates, Rossman said. Other banks have their own difficulty programs where you can apply. It may be helpful to explain your situation to your publisher, experts say. You may have lost your job, but are looking for work or expect to start receiving unemployment benefits soon.
A cardholder can allow you to pay less than your minimum payment. Whatever agreement you make, make sure you get something in writing from the bank describing the terms.
If you expect to run into payment problems, your best bet may be to find a financial advisor at the National Credit Counseling Foundation.
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“They will help you develop a plan to address your debt challenges,” McClary said. An advisor can help you work out a budget, which will help you see where you can transfer some money from to your debt.
In some cases, an advisor will reach out on behalf of your creditors or give you strategies to get the most relief.
In general, McClary said, people with multiple credit cards want to prioritize their larger balances.
That’s because those accounts, “if they fall into abuse, would have a much greater impact on your credit score.”
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