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If you're struggling financially during the pandemic, it might be time to put your credit card payments on pause.
Personal finance expert and Washington Post columnist Michelle Singletary's latest book, "What to Do With Your Money When Crisis Hits," outlines a smart strategy for prioritizing your financial life to stay afloat during tough times.
One of the lowest priority items, she writes, should be your credit card bill. Here's why she says this usually important bill can wait if you're having trouble with money during the pandemic.
The rare occasion when credit cards bills should be your lowest prioritySingletary likens paying bills to the triage method used in hospital emergency rooms, where the most extreme or damaging injuries should come first. "When you're in the middle of a financial crisis, your credit card payment is most like the patient with the sprained ankle," Singletary writes.
Your credit card payments can be a last priority, along with things like student loans and medical debt. While federal student loans are paused during the pandemic, you may still be responsible for private student loans that don't have forbearance available, or medical debts. For these, the best move is to contact the agency or lender and explain your situation.
Singletary warns that it's not the advice she'd usually give. "I want to be clear about something: Under normal circumstances, you should make every effort to meet all of your financial obligations," she writes. However, if it's necessary to get by right now, it's something you can do.
If you have to put your credit card payments on pause, make sure to contact the company, and watch your credit scoreSingletary recommends several steps for anyone using their credit cards to stay afloat during the pandemic. Letting your credit card carry a balance can be damaging, both to your credit score and your overall balance. However, Singletary says there are several ways to minimize the damage.
Staying in contact with your credit card company will be helpful. "Contact the credit card issuer to request a pause in your payment," she writes. Credit card companies can help by reducing interest rates, reducing how much you owe later on, and sometimes, all you have to do is ask.
"You're probably afraid that your request for a pause in your payments will be denied. It might be. However, you won't know if you don't at least reach out to your creditors and ask for some relief," Singletary writes. This advice can apply to private student loans and medical debt as well.
Your credit score could also be affected, and it might be worth keeping an eye on. During the pandemic, Americans are able to access their credit scores for free weekly through April 2022. On your credit report, you'll be able to spot errors, and make sure that any debts are reported correctly.
"You can fix damage to your credit history later, after you've recovered financially," Singletary writes.
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