Due to the outbreak of the deadly coronavirus, most of the businesses are shuttered. And eventually, many people are losing their jobs or noticing a substantial amount of pay cut.
According to a recent BBC report, more than 1 million people in Canada have lost their jobs in March 2020 due to the outbreak of COVID-19!
That’s why most of the people are slogging to make payments for their debts. Especially people with credit card debts are worried the most. The reason being, the high APRs (Annual Percentage Rate) of credit cards!
By the way, are you having credit card debt? If yes, you aren’t alone buddy! Many of the credit card holders have entered this pandemic with credit card debt!
A CBC report states that the average credit card debt in Canada was around $4,300 before the pandemic hit the country!
Many credit card holders were furious about why the government is not providing financial relief for credit card bills, like that for small businesses, homeowners, etc.
So, if you are going through financial hardship due to the pandemic, talk to your credit card issuer. And explain your present financial situation. Many credit card companies and banks are offering relief assistance programs, a cut in their interest rates, etc.
Otherwise, your credit score might take a hit due to the nonpayment of your credit card bills! So, before you miss or make a late payment, talk to the credit card issuer first!
If you are going through financial hardship due to COVID-19, you can seek relief from your creditors. You may get some relief. But that will be temporary provision. The bitter truth is, you will still owe your debts!!
So, what if you can eliminate your credit card debts? Yes, for that, you need to look for some strategies on how to deal with credit card debts during this pandemic!
You can opt for the balance transfer method
Well, if you are trapped with multiple high-interest credit card debts, opting for the balance transfer method can help you!
It is a process of transferring your multiple high-interest credit card debts to a new card with a lower interest rate. It will help you to pay off your credit card debts with ease.
Earlier, you had to shell out more money to make interest payments for your multiple credit cards. But now, you can focus only on your new card, and thereby, most of your payments will go towards your principal amount!
Secondly, the interest rate of the balance transfer card will be comparatively much lower than your existing credit cards.
So, overall, you can save a substantial amount of money on your interest payments! And at the same time, you can get rid of managing multiple credit card debts!
You may come across several balance transfer cards that offer 0% interest for an introductory period. For example, MBNA True Line Mastercard is offering 0% interest for an introductory period of 10 months. After this introductory period, the interest rate will be around 12.99%.
So, I would suggest you opt for a balance transfer card which offers 0% interest even if for an introductory period! And try to pay off your debt within that period so that you don’t need to make any interest payments!
However, before opting for a balance transfer card, make sure to read the terms and conditions carefully! Especially, check the introductory period, if any, interest rate after that period, balance transfer fees, etc.
You can opt for a debt consolidation program
Are you exhausted with your multiple credit card debts?
If yes, then it’s quite normal! The high APRs of credit cards along with different payment dates for multiple credit cards can make your financial life complicated! And if you miss a payment, then you have to shell out more for paying off your debts! What to do!
At this point, what if you get a chance to consolidate your credit card debts to a single payment every month? And that too at a lower interest rate!
Yes, you heard it right!
And this is known as debt consolidation! To find the right debt consolidation option, talk to a genuine consolidation company or an experienced debt law firm!
Most likely, they will have financial coaches who will guide you with the entire process. At first, they will assess your financial situation. And provide you with a payment plan that you can afford to pay! Besides, the company will try to negotiate with your creditors to reduce interest rates.
Once your creditors agree, you have to start making a single payment every month to the debt law firm for paying off your multiple debts. The company, in turn, will distribute the money among your creditors depending on the debt amount!
So, you can save money on your interest payments and stop worrying about your credit card debts any more! The attorneys of the debt law firm will deal with your creditors and do the needful!
In short, you are saving money as the interest rates are gonna be reduced. And it’s an effective way to eliminate credit card debt with ease!
So, what are you waiting for?
Follow the above tips and deal with your credit card debts strategically during this pandemic! And live a debt-free life ahead!
Lastly, stay home, stay safe! Don’t go out unnecessarily and always maintain social distancing!