How to Manage Credit Cards If You Are Unemployed

Most people apply for credit cards in good faith without giving any thought to the possibility of being unemployed or suddenly thrust into job loss. However, tough economic times teach us that job loss and credit card bills do not mix. While applying for a credit card is still relatively easy (credit card companies are still advertising and mailing out offers), prudence would suggest that you do not accept credit card offers without seriously reviewing your personal debt status and prospects for continued employment.

Difficulty:

Moderate

Instructions

1. Where possible, prepare in advance for unemployment and job loss by eliminating credit card debt. If what you owe is too large an amount to pay off all at once, consolidate credit card bills by using free balance transfer credit cards with low interest rates. Try to pay the entire credit card balance before the introductory interest rate expires. Cut up the cards and close the accounts of those credit cards whose balances were transferred.

2. Discard and shred credit card offers that you receive by mail, even if they offer the best credit card deals. This prevents identify theft and helps you avoid the temptation to apply for a credit card and increase personal debt as well. Although credit card TV commercials look appealing, do a reality test of your personal debt before ever responding to these free credit lures.

3. Get a debit card, cash card, or check card. These cards can be used like credit cards, but without the impulse to overspend (you can only spend up to the balance in your checking or savings account). Most merchants now accept debit cards, cash cards, or check cards for purchases because they are Visa cards and MasterCard cards. If your merchant does not accept debit cards, usually purchases can still be made by running the transaction through the credit setting.

4. If you are experiencing credit card problems and are unable to make payments, contact all credit card companies immediately. Find out how you can freeze or reduce interest rates or credit card payments until you are re-employed. Look for ways to reduce and eliminate all unessential expenses including exploring ways to pay off credit card debt.

Tips & Warnings

• According to recent surveys in USA Today, 59% of Americans have credit card debt. In a tough economy with unemployment on the rise, it is highly likely that credit card problems will be a result. Act now to reduce or eliminate credit card debt whether employed or not.

Resources

• 6 Keys to a Successful Job Search
• What to Do If You've Lost Your Job and Are Unemployed
• Christian Unemployment Survival Guide