It is estimated that over 100 million consumers were carrying some form of credit card debt when COVID-19 became a worldwide pandemic. Approximately 60% of credit card holders carry debt month-to-month. But with unemployment numbers soaring, getting out of credit card debt may become increasingly difficult.
Banks are beginning to become nervous and are tightening their lending standards in many cases. For example, it may be more difficult to land a 0% balance transfer offer than it was in times past. But credit card companies are typically willing to work with you if you initiate contact. The average interest rate is 17% so start there by asking your creditor to lower it, even if it’s just temporarily. Or try asking if you can skip a payment, preferably interest-free.
In most cases, financial experts would recommend paying off high-interest credit cards. But this isn’t most cases. Some are recommending you pay only the minimums if possible and hold on to cash until the economy becomes more predictable. There really is no substitute to money in the bank or cash on hand in order to meet your near-term financial needs.