COVID-19: Options for managing your credit card under the current climate
Are your credit card payments stressing you out? Sudden changes to your financial situation and unexpected expenses during the Coronavirus (COVID-19) pandemic can often put a strain on your household budget. To help, the Credit Savvy Team have compiled some of the available options introduced by various credit card providers, including the big 4 banks, that you may like to consider when managing your credit card under these tough conditions.
Talk to your credit card provider about their support options
If you’re struggling to make your credit card repayments, it’s important that you get in touch with your credit card provider as soon as possible and ask how they can assist you. Many credit card providers are offering various forms of assistance to their customers such as:
- Reducing minimum monthly repayments
- Waiving or refunding late payment fees
- Reducing interest rates on certain credit cards
- Repayment pauses
Find ways to ease your credit card stress
In addition to the support measures available through your credit card provider, there are several other things you might like to consider to help take some of the stress out of your credit card:
- Consider setting up direct debits or autopay to help ensure you make your repayment each month
- Check if your credit card provider offers any spend tracking features to help you monitor and manage your spending habits
- Review the credit limits on all of your credit cards and assess if you need to change any of them to a lower amount so you’re less tempted to spend beyond your means
What if I’m not affected yet?
If you feel you have not been impacted by COVID-19, there are still many precautionary steps you can take to prepare for the worst-case scenario. Here are some things you may like to consider:
- Can my current credit card provider offer me a better interest rate or waive any fees?
- Can I pay more than the minimum amount to help reduce my total outstanding balance?
- Do I have an emergency fund in case my situation changes?
- Is my budget flexible enough to account for potential changes?
Can I defer my credit card repayments?
Some credit card providers are offering their customers the ability to defer their repayments for a set number of months. Get in touch with your credit card provider or visit their website for specific information about their deferral options.
Should I pay more than the minimum monthly amount?
Where possible, consider paying more than your required minimum payment. This will help reduce the interest you are charged as your outstanding balance reduces.
Can missing my credit card repayments affect my credit score?
If you don’t have any special arrangements in place with your credit card provider, missing your repayments can negatively impact your credit score, which could affect your future credit applications. Check out our article for more information: Common COVID-19 Questions: Credit card repayments & your credit score
Where can I find additional resources?
If you’re experiencing financial hardship and are having trouble making your repayments, get in touch with your financial provider as a priority, as they may have dedicated teams to support you through these tough times. You can also check out a range of resources in our Key Resources article.
The COVID-19 & your finances series contains tips and support information to help you manage your finances during this difficult time.
The information in this article is correct as at 23 April 2020. Credit Savvy endeavours to provide accurate information and no responsibility is taken for errors or oversights.