Coronavirus: How to manage your credit card

The low-down on the details you may be wondering about during the pandemic

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We’ll continue updating this page with resources and information as new details emerge on how Canadian leaders and businesses are responding to COVID-19.

Coronavirus is affecting us all in many different ways. If you have a credit card, you might have questions about how the current situation will affect your account and other features, such as insurance, interest rates or introductory offers. If you’re looking at getting a credit card to help manage expenses or consolidate existing balances at this time, there are some criteria you need to be aware of. We have put this guide together to help you find the information you need to help manage your credit card during this time.

Managing existing credit card balances

As the economic climate shifts, this might be the right time to simplify your finances and consolidate some of your debts. If you’re worried about keeping up with your current credit card repayments and interest charges, there are a few options you can look at to help manage the balance.

This includes hardship policies offered through your current bank or provider, which are outlined in further detail below. You could also consider a new balance transfer credit card or a loan that is designed to help in this situation. Keep in mind that there are eligibility criteria you will have to meet and documents (including payslips) you will need to provide upon application.

Balance transfer credit cards

A balance transfer card could give you a a very low introductory interest rate for anywhere from 6 to 12 months when you move your existing debt to a new card with a balance transfer offer. This is a great option for those who are accruing interest on current balances and are eligible for a new card. However, you should note that after the introductory period you will be charged interest on any remaining balance, usually at the higher cash advance rate.

There are a few other key details to remember before you apply for a balance transfer card, including the following:

  • Most balance transfer cards accept debts from Canadian credit cards, charge cards and store cards issued by a different provider.
  • Some cards also accept debts from personal loans when they are issued by a different provider.

The amount of debt you can balance transfer depends on the credit limit you’re approved for on the new card. This, in turn, is based on what you could reasonably afford to pay off over a certain length of time (based on a range of personal and financial factors). So even if you’re approved you may only be able to get a partial balance transfer. Learn more about balance transfer limits before you apply.

What if I don’t qualify for a new credit card?

If a balance transfer credit card isn’t right for you, or you are not eligible, there are other options. A debt consolidation personal loan typically allows you borrow from $1,000 to $100,000 without needing to use an asset, like a car or property, as security. You can use the loan for any worthwhile purpose and repay the loan plus interest over an agreed term.

What if I can’t make my repayments?

Canada’s big 5 banks have made a commitment to work with personal and small business banking customers on a case-by-case basis help them through financial trouble they experience from COVID-19. This includes the opportunity for relief on credit products.

Below are their published responses to coronavirus, what types of assistance they’re offering, and how you can request help.

ProviderCredit card support during COVID-19 pandemic
TD Canada Trust

Individual case-by-case basis

Call: 1-888-720-0075

CIBC

Individual case-by-case basis

Call: 1-877-454-9030

RBC

Individual case-by-case basis

Call: 1-800-769-2511

BMO

Individual case-by-case basis

Call: 1-877-788-1923

Scotiabank

Individual case-by-case basis

Call: 1-800-4-SCOTIA

Other repayment options

If you have a credit card from another provider, contact them directly to discuss your options. Be aware that many providers are experiencing a high volume of calls and inquiries, so it could take time. You may be able to visit a branch instead – but it is worth checking your provider’s website for updates on whether branches are currently open.

You may also want to read our guide on what happens when you can’t pay your credit card bill, which includes further details about the steps involved.

What if I need emergency funds?

The majority of coronavirus financial support packages focus on lending and repayment relief. However, if you need access to funds, you could contact your provider’s financial hardship team to discuss your options.

You could also consider the following credit card options:

  • Requesting a credit limit increase. This will give you access to more funds through your existing credit card account. But be aware that increasing your credit limit can also increase potential interest costs and may lead to further debt. You can learn more and weigh up the pros and cons in this guide.
  • Withdrawing cash. While you could use your credit card to withdraw cash from an ATM, this typically attracts cash advance fees and interest charges from the date of the transaction. As a result, the costs can quickly add up and leave you with even more debt.

How to get financial help in Canada

What if I had travel booked through my card?

It is unlikely your trip will be covered by travel insurance, as most policies have general exclusions for both “known events” and “pandemics”. However, if you’ve thoroughly read through your product disclosure statement and believe there are extenuating circumstances, you can contact your credit card’s insurance provider to see if you can make a claim.

Does my credit card travel insurance cover COVID-19?

What if a travel company I booked with goes bankrupt?

With most insurance policies, this would come under any information about “insolvency”. Similar to other travel insurance claims, most complimentary credit card insurance policies have exclusions for insolvency. However, it does vary depending on the circumstances, so check with your credit card’s insurance policy provider. You could also call the business or the voluntary administrator that is overseeing the process.

Travel booking changes and cancellations

Airlines, cruise companies, tour companies and accommodation providers are all updating their policies and offerings around travel changes and cancellations. This includes some fee-free options.

For example, on 19 March 2020, Airbnb announced it would offer full refunds for reservations and Airbnb Experience bookings made on or before 14 March 2020 if the check-in date is between then and 14 April 2020.

Getting a refund through your credit card

If you do cancel your travel plans and have it refunded to your credit card, keep in mind that it could take a few days to show up on your account.

While most refunds should come directly from the business you have booked travel with, you may also have some other options through your credit card, such as requesting a chargeback. You can learn more about different credit card refund options or contact your provider to find out what’s possible.

Applying for a new credit card

This may be a time when you are considering different financial options, including a new credit card. If that’s the case, make sure you carefully think about how you would manage the account and repayments to reduce the risk of ongoing credit card debt. You could start by calculating your monthly credit card payment.

Below, we have included some more details about different types of credit cards that people might be considering at the moment. Ensure that you meet all the eligibility criteria and carefully read the product disclosure statement before applying. In addition to the balance transfer credit cards mentioned earlier, consider the following option.

Instant approval credit cards

If you’re looking for a credit card that offers easy and instant approval, there are a few details to keep in mind. First, approval is based on the eligibility criteria for a particular credit card. This means it can vary, but typically will consider factors including your income, residency status, existing assets, current debts and your credit score.

Second, when you apply for a credit card online, you’ll usually get a response from the bank or provider within 60 seconds. That’s as close to “instant” as it gets in this case. But, once again, you will only be approved if you meet the card’s eligibility criteria.

On top of that, it can take up to 10 business days to receive a new card in the post under normal circumstances. Given the current situation, it could take even longer.

How could the coronavirus pandemic affect my credit score?

When it comes to your credit card, a missed payment, default or serious infringement will negatively impact your credit score. This is no different to what would happen under normal circumstances.

Safeguarding your credit score the COVID-19 outbreak

You can also check your credit score through the services below:

Name Product Starting price Trial period Price per month Credit scores Credit monitoring Credit reports Update frequency
Mogo Credit Score
Mogo Credit Score
$0
N/A
$0
Equifax
Yes
Equifax
Monthly
Open a MogoAccount and access your credit score for free with no impact to your score. Receive your updated Equifax credit score every month.
Credit Verify Credit Score
$1
7 days
$24.95
TransUnion
Yes
TransUnion
Monthly
Instantly access your credit score and report online and get daily alerts and updates. Plus, premium members get $25 in bonus rewards every month which can be used towards discounts on everything from shopping and entertainment to dining and travel.
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Compare up to 4 providers

Bottom line

If you need help managing your credit card payments during the coronavirus outbreak, contact your credit issuer to discuss your options. You can also look at consolidating your debt by transferring your it to a balance transfer credit card and save on interest payments. Making sure you stay on top of your credit card payments and debts will help ensure that your credit score doesn’t take a hit.

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