Efforts to stem the spread of the coronavirus with shelter-in-place orders and closures of all but essential businesses have cut many workers’ income. Those who have lost jobs or hours since the COVID-19 crisis hit face a lot of tough financial decisions.
One of those is how to make regular bill payments. The good news is that credit card issuers are responding to the crisis with help for people in distress.
If you contact your credit card issuer, you may be able to delay your upcoming payments. But you need to get in touch because payment waivers are not automatic.
“Where we are today is something we’ve never experienced before,” says Rod Griffin, senior director of consumer education and awareness at credit bureau Experian. “We’re all trying to figure it out.”
Here are some tips on how to handle credit card payments if your income is hurt by the coronavirus.
What Are Credit Card Companies Doing to Help?
Credit card issuers urge customers affected by the coronavirus to reach out if they are having financial problems. In some cases, issuers are offering relief.
Here are a few examples:
- Apple Card has let cardholders know that they can skip their March payments and incur no interest charges.
- Capital One customers are eligible for assistance with payments and fees.
- Citi cardholders can request credit line increases and use forbearances, meaning payments could be missed for a period of time without penalties.
When you contact issuers, try to assure them that you’re working on paying as much as you can to preserve your positive credit record.
What Are the Three National Credit Bureaus Doing to Help?
The major credit bureaus, Experian, Equifax and TransUnion, are taking steps to help consumers weather the coronavirus storm.
Lenders must notify the bureaus if a customer has been placed in a special program, such as a forbearance or deferred payment plan, states a March 2020 report by the Consumer Data Industry Association. The notifications ensure that these programs will not hurt consumers’ credit reports, according to the association, which counts credit bureaus as members.
Both FICO and VantageScore have publicly stated that people in forbearance or deferred payment plans will not see their credit scores suffer as a result. Still, check your credit report from each credit bureau, which you can do for free at AnnualCreditReport.com and elsewhere.
“Know what’s in that report,” Griffin says, because “credit history is going to be important as we move forward.”
But don’t obsess about it, he says. Your priorities should be taking care of your family and your health, and then, if necessary, talking to lenders about how to protect your finances, Griffin says.
Credit scores “should not necessarily be at the top of the list,” he adds…….Read More>>