What to Do While Waiting for Unemployment Benefits

Are you waiting for unemployment benefits? Here are some things to know as you think about short-term financial relief


As COVID-19 has spread, millions of people have lost their jobs or had their hours reduced. And unemployment offices are overwhelmed trying to handle the surge in claims and expanded eligibility.

If you’re wondering how you’re going to pay your bills and living expenses while waiting for unemployment benefits, you’re not alone. Here are some things to think about as you consider short-term financial relief.

Unemployment Insurance Basics

The Coronavirus Aid, Relief, and Economic Security (CARES) Act and other recent legislation permitted states to expand and extend unemployment insurance so more people affected by COVID-19 qualify for benefits. 

Learn more about how unemployment benefits work and how to apply in your state. 

A Few Options to Consider First

Some state unemployment offices have been overwhelmed with the recent surge in claims. After you submit your claim, the Department of Labor says it generally can take two to three weeks to receive a benefit check. 

But what if you can’t wait a few weeks and need money now? As you adjust and plan financially after a job loss, you could consider these options first:

Evaluate Bills and Take Steps to Reduce Expenses 

If you find yourself in a position where you can’t make payments on bills, credit cards or other loans, the Consumer Financial Protection Bureau recommends working with companies and lenders directly. Capital One® customers experiencing financial difficulties as a result of COVID-19 should reach out directly to discuss available resources.

You might also want to consider cutting nonessential expenses. If you had to cancel travel or entertainment plans because of COVID-19, you might be eligible for a refund. Check with vendors and learn more about how to request a refund because of COVID-19.

Examine Your Savings Accounts and Emergency Funds 

If you have money in a savings account or emergency fund, now could be the time to use it. If you can take some time to create a budget, it may help you use the money as efficiently and effectively as possible. Be sure to consider things like interest, fees and withdrawal limits if you take money out of a savings account.

Explore Opportunities to Make Money Online

There are online businesses that pay people to take surveys, participate in user testing, proofread content and more. But it’s always important to do your research, watch out for scams and make sure the company is reputable. 

Look for Other Aid 

Depending on your circumstances, there might be other support that can help you through this tough time. Nonprofits and other organizations might offer aid for service industry workers, freelancers, people struggling with medical expenses and others. And if you need immediate help getting food, learn more about how to access food banks.

Thinking About Tapping Into Retirement Accounts? 

Taking money out of your retirement accounts can be a riskier short-term solution. You might be considering hardship distributions, early withdrawals or loans. And depending on your circumstances, the CARES Act could give you more flexibility when it comes to withdrawing money from IRAs and 401(k) or 403(b) plans. 

But before you do anything, it’s a good idea to think through the tax implications and the long-term financial effects. 

If you’re borrowing from your retirement account, you’ll want to consider how and when you’ll be able to repay the money. Taking money out of retirement accounts could disrupt potential growth—and early withdrawals could make retirement more difficult. 

If possible, consider talking with an experienced financial adviser before you withdraw funds early.

What About Credit Cards and Other Loans?

When times are tough, you might turn to your credit cards. Personal loans might be another option you’re considering. Before you make any decisions, it’s important to think about your budget and whether you can afford to make ongoing payments. 

Credit Card Rewards

If you have a rewards credit card, you might be able to redeem cash back or miles to help you pay for expenses while you’re waiting for unemployment benefits. If you’re a Capital One customer, learn more about how to redeem your rewards.

Cash Advances 

Some credit cards let you take out a portion of your credit limit in cash. This is also known as a cash advance. Using your credit card to get cash from an ATM is expensive. And cash advances might have additional fees, too. Plus, interest rates on cash advances are typically higher than interest rates on regular credit card purchases. 

Personal Loans 

There are a lot of personal loans and lines of credit available, but they can come with unique risks, costs and regulations. Capital One has information about types of credit you may want to avoid, including payday loans, car title loans and tax refund anticipation loans. 

Before accepting a personal loan, be sure to consider whom you’re borrowing from. And make sure you understand things like interest rates, payment schedules and penalties.

Asking for Help 

As you wait for unemployment benefits, it’s worth considering how financial decisions you make in response to the coronavirus today could affect you in the future. It might be a good idea to seek the advice of a qualified financial adviser. And some organizations might even offer free advice for people affected by COVID-19. 

Finances aside, if you’re having trouble managing stress, the Department of Health & Human Services has free resources that may help.


Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention (CDC)

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

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