When you are unemployed, paying off your credit card bills can be the last thing on your mind, particularly as you will probably be on quite a tight budget. But paying off your credit card bills is necessary because it helps prevent you from getting into further financial trouble in the future.
It can be hard to know how to keep up with credit card bills when funds are tight, but there are things that you can do.
The first thing you will need to do is talk to your credit card company. Let them know what your situation is, and they will be able to advise you. Don’t be afraid, most credit card companies are actually quite nice if you are having problems. All they care about is getting your money, and they will do whatever they can to help you give it to them. This includes things like freezing interest and setting up a payment plan. This is where you agree to pay a small amount each month until the balance is completely paid off. Doing this will help maintain good relationships and prevent legal action being taken by the credit card company. Always stick to any payment plans, failure to do so could have a negative impact on your credit history.
Prioritise your debts, this is one of the most important things that you can do when you are unemployed. Rent or the mortgage, gas, electricity, water and food should be your main priorities, tackle the credit cards in order of importance.
Do not agree to pay more than you can afford, when you talk to the credit card company they will probably do an income assessment, this means going through your income and expenditure and seeing what repayments you can reasonably afford. Do not let them pressure you, agreeing to pay more than you can afford will not only leave you in a worse situation financially, but they could also take legal action against you if you do not pay. Making token payments can be a short-term solution whilst you get your financial affairs sorted. Send small payments to the companies with an explanation of what you are doing, then they will know you are paying them something and you are keen to get things sorted which will reflect well on you.
If you are in serious financial trouble, then contact your local not for profit debt company and ask their advice. They will provide fair, sensible and objective help, and will be able to figure out the best debt solution for you based on your circumstances.