Coronavirus and Credit Cards
What do you do if you can’t pay off your credit card because of coronavirus?
We know that millions of people have lost their jobs and are filing for unemployment. We know that unemployment is slow in coming. We know that borrowers are financially squeezed.
Even the lenders know that – but some of them are not doing very well in being proactive about this reality. They’re just hoping that they’ll still get paid as usual, even though the borrowers don’t have the money. Dumb, right?
With this in mind, we put together the following short script that you can use to try to get your credit card company to play ball with you.
Letter to the credit card company:
“The financial impacts of coronavirus are obvious and have affected us directly. We are requesting renegotiation of our credit agreements including the following:
· Deferred payments
· Lower monthly minimums
· Waving interest and late fees
· Increasing credit limits
We can pledge a certain portion of unemployment and stimulus to our credit lines, but we cannot promise that we will have the same kind of budgetary power that we did before the pandemic hit.
We request that the company contact us directly to resolve this. We appreciate your assistance at this time.”
Let’s talk a little bit about the types of support requested in this letter.
Deferred payments is something that’s fairly simple for the lender to do. They just pause the loan and pick up after coronavirus has been solved to some extent. This is sometimes called forbearance.
Lower monthly minimums allow the borrower to simply make smaller payments and pay the principal off more slowly. It doesn’t really have any concrete advantage to the borrower, except they get a lower monthly minimum payment.
Waiving insurance and interest and late fees is another way that companies can extend compassion during coronavirus times.
Lastly, increasing credit limits may allow some borrowers to get creative in how they budget during coronavirus impacts.
Here’s an additional tip that’s very important when it comes to credit card debt.
As a borrower, you can play different credit card companies off of each other. Sometimes this type of process is referred to as debt consolidation. In other words, you can take a certain line of credit that’s becoming problematic and fold it into some other line of credit, in order to close it out if a creditor is not being reasonable.
Different credit card companies have different policies and different offers. Say you have a certain level of debt with one company that’s being aggressive and punitive about payment. Then maybe you have half of that amount of debt with another company that’s being pretty reasonable. You may be able to transfer all of the debt to the better company – and even if you just tell the other company that you may be switching, they may suddenly work with you in a better way…
That’s one of the cards that you have in your hand as a borrower, but it’s not always easy. Many credit card companies say they are approaching borrower situations on a case-by-case basis, so it really makes sense to talk directly with each of your credit card companies to see what you can work out.
For more, keep an eye on the web site at COVID-19 Financial.
Learn more ways to protect yourself during this COVID – 19 Crisis, visit CoronaVirus Protection Guru Today.