Today many individuals are losing jobs due to the COVID-19 pandemic. Due to this issue, many individuals are worried about their employment contracts. Two main reasons behind this are their credit card bills and other debts. Losing jobs can affect their credit score and even daily lifestyle. Lucky are those people who have availed secured credit cards. In case they are thinking of purchasing credit cards then they should read first progress platinum MasterCard reviews. According to us, a user should not skip reading assent platinum card review and a review of the total visa credit card.
Below are some credit card tips after losing your job:
•Using severance balances: After losing jobs, many individuals get severance balances. These amount are based on the length of their employment history and the amount they’ve earned. This payment method is introduced to help people who’ve just lost their jobs. It acts as a financial bridge until the individuals get their next jobs. Many employers provide this amount without even asking.
Here individuals should focus on the usage of this amount. If they’re using credit cards or having loans then this amount can help in repayments. In short, they should focus on savings rather than spending it.
•Prioritize payments: After losing jobs, it is not easy to deal with frustration. Mainly this frustration is because they are not able to enjoy their expensive lifestyle. However, frustration can be easily removed by cutting unnecessary expenses.
Most of the people don’t cut their expenses in the initial stages and enjoy quality lifestyle with the help of money in their banks. When they are not able to find the jobs for longer duration they are not able to pay their credit card bills. The situation worsens when the debts are carried to the next months. Here interest rate plays a crucial role. The effect of interest on the situation depends upon the type of credit card the user is having.
For example, if any user is having an unsecured credit cards for bad credit then the interest rate charged is approximately 15%. In case he is having an unsecured card for bad credit, the interest rate charged is more than 24%. If any user is having a debt of 10,000 and he has to pay 2% interest monthly. The amount he has to pay after one month is $10,200. This figure can be huge depending upon the debt.
•Purchasing secured cards: Though the secured cards are purchased by people who are suffering from bad or no credit. But their security features can help a lot in Covid-19 pandemic. While purchasing secured credit cards, individuals have to deposit the security amount called collaterals. These collaterals are equal to the credit limit of the cards. This feature is designed so that banks and companies can secure their money.
Secured cards can save people by saving their credit scores. In case any user is not able to repay the credit card debt then his collateral is used for the payment. This way his credit card is not affected.
•Savings: If people are using Unsecured credit cards then only savings can help them out in repayments. As there are no collaterals, the interest rates will keep Increasing with the debt.
•Settle out the debt: If any user is having too much debt and is unable to pay then he should approach his lender for settling out the debt. The lender may cancel the interest of few months according to the financial situation of the user. But he’ll definitely take the original money.
•Ask for moratorium periods: Users can also ask for the moratorium periods. Sometimes due to bad financial conditions, lenders provide users the grace periods. In these periods, users don’t have to pay installments.