Tricks for Avoiding Debts during Pandemic
The pandemic has caught many many people across Canada in a sticky situation. Due to the lockdown and social distancing, most of the businesses have been closed for the last couple of months, leading to unemployment. Now, many people are worried about paying their credit card bills, electricity bills, and house rent.
In this situation, many people are considering tapping on their emergency savings and taking loans based on credit card sales. While everyone should talk to their financial advisors about the steps that should be taken during this trying time, here is some advice that you can consider for now.
Will Credit Card Companies Lower Their Annual Percentage Rate?
A survey conducted in March 2020 has shown that every one in seven credit cardholders has said that due to the financial disruption caused by the pandemic, they are not confident about paying the credit card bills in full.
The good news is, most of the credit card companies are thinking about lowering the interest rates on the current balance. However, you have to get in touch with your creditor to know whether you will be able to get that benefit. There is no harm in getting upfront about it. Let your creditor know about your current financial condition, and ask them to offer some leeway in paying the debt off.
There are many credit card companies that are assisting people who have taken loans based on credit card sales. Some major credit card companies have said that if the current pandemic has impacted the credit borrower financially, they are ready to refund the interest charges. The company even talked about waiving the late fees off and reinstating rewards points if any to the borrowers’ credit card.
Should You Take out Your Money from Your Retirement Savings?
Even though the financial blow of the pandemic is quite severe for many, the financial advisors think that you should still consider twice before taking a loan from your retirement plan. Most of the bills that you pay can wait for a few more months. Talk to the landlords and utility managers to check whether they are offering any deferment programs for people who are facing financial troubles due to the pandemic. The option of availing loans from your retirement plan will always be there, so you should not take money out of it if it is not necessary.
How to Make Provision for Money?
The government is taking different steps to provide some relief to the small business owners across the nation. There are some small business loans and resources allotted for the business owners to help them handle the losses and disruptions due to the COVID-19. You have to find the type of assistance the government is offering to the business owners and others to check if you are eligible for them. If you are, then don’t waste any time in applying online.
While the credit card companies are reducing the interest on loans based on credit card sales and waiving off the late fees, you should not rely solely on them. You need to check for other ways to increase your income. Search for temporary jobs in a different industry or find some freelancing opportunity in your current ones. It might be a compromise careerwise, but it will save you from putting yourself in a deep financial hole.