Many credit card providers are softening the COVID-19 blow by offering affected consumers a lifeline through a range of relief measures. These will help to take the pressure off customers by lowering the interest they pay and reducing their monthly repayments.
This is a welcome breather for the many people who are suffering financial hardship as a result of job losses or reduced working hours. Let’s take a look at how you can reduce your credit card debt thanks to these new measures.
Switch your existing card to a lower interest rate option
Some banks are allowing customers to transfer their balance from a credit card with a higher rate to a lower-rate option to help them save on fees. This should reduce the amount you pay over time and help you to manage your finances better. See a range of credit cards available in.
Change your credit limit
You might be allowed to reduce your credit limit to help keep your spending under control during the coronavirus outbreak. By cutting your spending and therefore the interest you owe, this will should reduce how much you have to pay off over time.
Set up a direct debit
Some credit card customers are being encouraged to set up a direct debit on their credit card to make sure they continue to deposit regular payments. Setting up a direct debit means you won’t have to remember when your payments are due, giving you one less thing to worry about at this stressful time.
Reduce your monthly repayments
Several banks have announced that they’re allowing customers to lower the amount they repay each month until they get back on their feet.
For instance, some are letting those in hardship reduce their monthly repayment amount to $5 a month or 0.5% of the closing balance (whichever is higher). Others have said they will refund any late fees for customers who have missed repayments in March.
Defer your repayments for up to six months
Another option is to defer your interest payments for a period, with some banks offering customers the chance to put their repayments on hold for up to six months. But be warned that with most cards you will still accrue interest and fees on your balance while you’re not making repayments.
You might be able to waive interest while you press pause on your repayments, so it’s worth checking with your provider. Most banks will also put a stop on your card if you’re deferring payments so you can’t accrue more debt while you’re not paying off the balance.
It’s really important to be proactive about managing your credit card if you are struggling to make your repayments. Remember that your credit score will be impacted if you miss a repayment, which could make it harder for you to borrow in the future.
Talk to your bank as soon as possible if you’re struggling financially and need help managing your credit card debt. Your provider will be well prepared to help you out - you’re definitely not alone in this and they will likely have dealt with similar situations before. Bear in mind that banks are experiencing a high volume of calls and emails at the moment, so it might take some time for them to come back to you.
In the meantime, you can keep an eye on your credit score and report for free on. Checking on ClearScore will never affect your score.