Unemployment in the US is hitting record highs and most experts believe unemployment rates will continue to rise further. Losing a job is one of the worst fears of the Americans. And now that unemployment rates are extremely high, millions of US card holders are highly concerned about their financial matters: how to pay down outstanding balances, manage credit cards and maintain good credit in tough economic times when hiring is so slow? Here are some useful tips for those who want to avoid serious financial troubles when looking for a new job!
First off, you need to get some temporary source of income while you’re looking for a new job. If you get laid off, you may file for unemployment compensation. For this, you may visit the unemployment office in your state or file a claim online or by phone.
If you haven’t lost your job but you think you might get laid off, it’s high time to take steps to protect yourself against potential financial losses. Generally, people whose jobs are in peril try to pay off their cards as soon as possible. But according to experts, it’s not the best idea. Creating an emergency fund is a more favorable course of action as it will let you access necessary funds when you need them.
Like it or not, but you will need to reassess your family budget. Go through your budget and prioritize your bills. Most probably, you will need to cut back some luxury or extra expenses to compensate for the decline in your income.
Sad to say, but today the tension between lenders and card holders is extremely high. Even though the credit industry reform has been approved and signed into law by President Barack Obama, the new laws won’t take effect until February 2010. Now more and more customers are watching their spending limits slashed. Interest rate hikes now hit even the best customers who have never been late with their payments.
If you have been hit with interest rate increases, don’t be afraid to call your issuer and ask for help. You may ask to lower your interest rate for a specified period of time. With today’s credit card defaults, your issuer is likely to meet your halfway and decrease your rate at least for a few months. If you have a high credit score, you may wish to consolidate your high-rate balances and move them to a balance transfer card with good terms.
Managing credit cards and your debt is critically important while you’re unemployed. You should keep paying your bills, at least minimum payments. Being late with one of your payments may negatively affect your accounts. Late payment penalties and default interest rates can make it harder for you to keep up with your payments. Again, you need an emergency fund to fulfill your financial obligations. Be sure to create a savings fund that will provide you with necessary resources in case of emergency.