Credit Cards Advice for The Unemployed and The Potentially Unemployed
If you’ve recently lost your job and joined the ranks of the unemployed, don’t despair. With what the job market and the economy is today, many people are becoming unemployed or are afraid of becoming unemployed in the future. Not having a secure source of income is a scary prospect, to say the least. It brings all kind of questions, insecurities and a whole world of uncertainties; hence it is important to know how to manage your credit cards in the event you do become unemployed.
Mishandling credit cards are the easiest thing to do during these tumultuous times. You could be freaking about making payments on time, or barely making them at all. Or you could be tempted to dive into your regular lifestyle by borrowing on a line of credit. Before you do any of that, here’s some helpful advice:
If you’re worried about potentially becoming unemployed in the near future, you should be rethinking your budget and managing your finances very differently. Try and minimize the amount you are purchasing on credit. If possible try not to use your credit cards at all. With a prioritized budget, you can focus and spend only on the important things while cutting out the rest. If you have student loans or credit card bills to pay off and you find that you have to let a payment go late due to a prioritized budget, then it’s a good idea to contact the credit card company. Some creditors can be surprisingly helpful if you are forthcoming about your situation.
Alternatively, if you think you are going to end up unemployed and may have to live off credit for awhile because of lack of savings, then it might be a good idea to carefully consider your assets and available credit. You can also consider getting a new credit card now before it’s too late as it can be difficult getting a new card once you do lose your job but keep a close eye on your balances. Carrying a large balance of over 30% will negatively affect your credit score so be aware of that too.
If you have just become unemployed, the temptation to use your credit cards is so much more than ever before. The need to make necessary payments, or continue living a normal lifestyle on credit can be high and may land you in possible hot waters. If you don’t have sufficient savings to pay for all the necessities a credit card may be your only option but you will eventually have to clear out those balances. So spend only on what is absolutely important and strip away the rest. While small expenses like multiple magazine subscriptions don’t mean or matter much during normal days, when you’re unemployed, every penny counts.
You might still be able to get a credit card after you’ve become unemployed, but getting one might not be very wise. The only credit cards that may be available to you will most definitely have high annual fees, insane interest rates, and a very low credit limit.
Try not to make your finances worse by sheer mismanagement of your credit cards. Regardless of your employment status, it is important to remember to monitor your credit card use and shore up on finances to keep afloat during difficult times.