The whole world is feeling the effect of COVID-19. The pandemic has hit everyone financially and emotionally. A lot of people don’t have jobs or are earning less due to a salary cut, the use of a credit card is increasing.
Also, since going to the bank or getting cash out is kind of scary, people are turning to credit cards. But the problem with this is that when you use your credit card too much, you end up with tons of credit card debt.
That can be a problem in this situation, especially if you are unable to pay. A credit card company will wait for a while before handing your debt to a local debt recovery firm. Know more about how a debt collection firm works to know what you are dealing with.
So, what is the solution? Do you stop using a credit card? No, because it is a lifeline in this crisis. But you have to be smart about using this. Also, here are some things you can do to ensure your account doesn’t go to collection. Also, if it does, read about debt collection and let a collector help you come up with a payment plan.
To know what you can do, you need to ask the right questions from the credit card company as listed below.
Ask credit card companies their COVID-19 relief programs
In case, the debt has gone to the collection before the pandemic hit. You can talk to the debt collector for a payment plan. They can be the negotiator, and due to the situation, most creditors will agree.
How to ensure you don’t get a credit card debt?
1. Minimum payment
It can be hard due to the situation, but interest will continue to accumulate if you don’t do anything. So, even a little payment against the debt is enough to ensure it doesn’t go to collection.
2. Check your bills minutely
You should always check your bills to ensure that your credit card statement is correct. If some charges are wrong or if there are any discrepancies, send the company a letter/notice to dispute it. All companies have to do an investigation and send you a report within 90 days. But due to COVID-19, it might get delayed. During this waiting period, a company cannot:
Lastly, times are difficult. You need to try and limit your credit card purchases to bare minimum. If your business or company is closed, find other sources of income. Don’t give up, good times will be here soon.
Also, since going to the bank or getting cash out is kind of scary, people are turning to credit cards. But the problem with this is that when you use your credit card too much, you end up with tons of credit card debt.
That can be a problem in this situation, especially if you are unable to pay. A credit card company will wait for a while before handing your debt to a local debt recovery firm. Know more about how a debt collection firm works to know what you are dealing with.
So, what is the solution? Do you stop using a credit card? No, because it is a lifeline in this crisis. But you have to be smart about using this. Also, here are some things you can do to ensure your account doesn’t go to collection. Also, if it does, read about debt collection and let a collector help you come up with a payment plan.
To know what you can do, you need to ask the right questions from the credit card company as listed below.
Ask credit card companies their COVID-19 relief programs
- A lot of companies are offering their customers multiple COVID-19 relief programs for their cards. To know about that, call them or visit their websites. Here are some of these policies for such times
- A credit card provider may waive the late fee. When you are a bit late in paying your debt, they charge a fee. But most of them are not charging that anymore.
- Some credit card companies are reducing the interest rate. That is a huge relief. Once the economy is better, they will resume their original interest rate though.
- They are also providing payment plans so that you can pay off the debt.
In case, the debt has gone to the collection before the pandemic hit. You can talk to the debt collector for a payment plan. They can be the negotiator, and due to the situation, most creditors will agree.
How to ensure you don’t get a credit card debt?
1. Minimum payment
It can be hard due to the situation, but interest will continue to accumulate if you don’t do anything. So, even a little payment against the debt is enough to ensure it doesn’t go to collection.
2. Check your bills minutely
You should always check your bills to ensure that your credit card statement is correct. If some charges are wrong or if there are any discrepancies, send the company a letter/notice to dispute it. All companies have to do an investigation and send you a report within 90 days. But due to COVID-19, it might get delayed. During this waiting period, a company cannot:
- Ask you to pay the debt.
- Cannot report the debt to credit reporting firms
- Discontinue your card.
Lastly, times are difficult. You need to try and limit your credit card purchases to bare minimum. If your business or company is closed, find other sources of income. Don’t give up, good times will be here soon.
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