Managing credit card debt while unemployed

Recently lost your job? Understanding your options is a key step to managing credit card debt.

Being unemployed can be stressful as well as hard on your finances. And if you’re dealing with credit card debt, that’s one more thing to think about. 

Here’s a look at some options that might help if you find yourself in that situation.

Contact your credit card company

If you become unemployed, the Consumer Financial Protection Bureau advises going over your expenses and thinking of ways to cut costs wherever you can. If you don’t think you can make your minimum monthly credit card payment, you can consider contacting your lender to discuss available options. Try to remember that you’re not the only person this has happened to. Credit card companies work every day with customers who can’t pay their bills.

Check your government aid eligibility

If you’ve been laid off, you might qualify for unemployment insurance. Unemployment benefits vary based on where you live or where you worked. You can contact the agency in your state to learn more about how it works and how to apply. 

Aside from unemployment insurance benefits, you can also look into whether you qualify for other government assistance programs. You could also consider other short-term relief options.

Find a trustworthy nonprofit credit counselor

Credit counseling agencies are dedicated to finding manageable ways to reduce and eventually eliminate your debt. They are usually nonprofit organizations that can offer free services or at least some services that you don’t have to pay for. 

A credit counselor might work on your behalf to talk to your creditors to work out a payment plan, a lower interest rate or a combination of options, depending on your needs. One approach credit counselors might offer is debt consolidation. You can also use a credit counselor to help you rework your budget, save money and improve your overall financial situation. 

Some credit counseling organizations charge fees before they settle your debts, or make false promises that your debts will go away. The Federal Trade Commission has a list of questions to ask to help you find the best counselor for you.

There are a few resources you can use if you are interested in trying or learning more about credit counseling: 

  • Call the National Foundation for Credit Counseling (NFCC) at 1-800-388-2227.
  • Check the NFCC website.
  • Check the Better Business Bureau to look up any credit counseling company you are considering to see whether they are highly rated for their services and customer care.

Carefully consider further credit card use

You might be able to use your credit card to cover expenses, like groceries or other bills. But it might make sense to use your card sparingly and limit spending to essentials. You could also consider these options:

  • Redeem credit card rewards. If you have a card with cash back, points or other user perks, it might be time to cash in on them. If you’re a Capital One customer, learn more about how to redeem your rewards.
  • Adjust your payment dates. If it feels like all your bills are due the same day each month, you might be able to change when your credit card payment is due. Your new due date will take effect within two billing cycles.
  • Make your minimum monthly payment, if possible. If you can’t manage the CFPB’s recommendation to pay your credit card bills in full each month, consider paying as much as you can but at least the minimum payment. It could help you avoid paying extra fees.
  • Apply for a balance transfer. A balance transfer could be a way to pay down an existing balance at a lower, more manageable interest rate for a limited time. This period could be anywhere from six months to two years, depending on the card and the offer. You’re still on the hook for minimum payments, but interest won’t add up during the promotional period. 

If you have an emergency fund, consider whether now is the time to use it.

Unemployment is hard, but you have options

You have a lot to manage while you’re unemployed, including your finances. It can all seem overwhelming, so think about ways to overcome your anxiety and prioritize your needs. Help is out there.

Change your payment due date

See how to adjust when your monthly Capital One bill is due.

Learn more

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