Credit card payment assistance plans that had been sought out by unemployed consumers have often varied, but in cases where consumers have either recently become unemployed or know that their job is ending in a set period of time, the way that they have addressed credit card debt is often varied and, when it comes to these practices that many consumers are implementing, financial professionals often point out that there are some mistakes that consumers may make, but also, some practices may help these individuals better focus on their financial needs that are more vital during a time where unemployment is in place.
Obviously, consumers who are unemployed are usually urged to contact their lender or creditor to inquire about any assistance that may be offered if unemployment will not end in a foreseeable amount of time. As example, some workers may know that their job will only be ending for a few months, which may better help them plan for debt payments during that timeframe where no income is being seen, but as we are looking at an unemployment rate of 9.1% here in October, this has led to questions of how long-term unemployed individuals are combating certain payments like credit cards.
The uncertainty about employment and even the future of some workers at their job has led to consumers focusing on paying down debts and saving rather than continuing to use credit and a traditional manner. In some instances, consumers are working on paying down their credit card debts as quickly as they can, and that may entail using savings or funds that may come from final paychecks, which may be helpful in some cases but could be detrimental to certain cardholders. Many financial professionals often point out that consumers who are unemployed should have savings built up so that they can address any financial problems that arise, and some go so far as to advise cardholders against making excessive payments when they really can’t spare the extra money.
This has led to one of the major debates in the area of paying down credit cards when a consumer is unemployed, as some consumers continue to make minimum payments and put savings aside in the hopes that their financial position will improve but do have some savings that can help, however others are using their funds to pay off as much of their debts as possible, which could cause problems if consumers are focusing on paying down credit card payment. As an example, there have been some consumers who stated that paying off credit cards was more important than their home loan, as using credit was one of the only ways that these consumers could purchase necessities and defaulting on their credit card or no longer having a line of credit available is something that these consumers have felt would be much worse than missing a home loan payment.
Sadly though, consumers who are unemployed and have not properly planned for these potential problems may have to turned to lenders in the hopes that financial assistance will be offered due to factors like unemployment. There are many lenders that might have hardship assistance programs in place that will allow consumers to avoid missed payments, then this can be helpful, but many advisers are pointing out that consumers who are carrying credit card balances may want to begin focusing more on spending less, paying them what they can, but leaving enough room so that they can put money away in their savings in case problems do arise.
While the practices implemented by a particular consumer when it concerns their credit card repayment plan will be a personal decision, here in October where consumers are still struggling with unemployment and various types of debts, many are being urged to address debt issues and attempt to pay off credit cards if at all possible but there are many advisers who also are stressing the importance of having a savings plan in place in case financial emergencies do arise as a result of unemployment.