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Coronavirus: How to manage your credit card
Information about hardship, ideal cards, travel policies and more.
As the U.S. continues to adapt to life under COVID-19, card providers have implemented several changes to their products to help consumers stay financially afloat and maintain card value over the course of the year. The expert credit card team at Finder has rounded up the biggest changes we’ve seen from card providers and listed the information you need to know below. We’ve also answered several of your most pressing questions to help you manage your card wisely during this time.
What's in this guide?
- Managing existing credit card balances
- What if I can't make my repayments?
- How can credit cards help my business?
- What if I need emergency funds?
- What if I booked travel using my card?
- What should I do with my credit card rewards during coronavirus?
- Will my elite status be affected?
- Applying for a new credit card
- How could the coronavirus pandemic affect my credit score?
- Bottom line
Managing existing credit card balances
In light of the economic climate shift, you might consider simplifying your finances and consolidating debts. If you’re worried about keeping up with your credit card repayments and interest charges, there are a few options you can consider to help you manage it all.
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 there are eligibility criteria you will have to meet upon application.
Balance transfer credit cards
A balance transfer card could give you a 0% intro APR for anywhere from six to 21 months when you move your existing debt to a new card with a balance transfer offer. This is a great option if you are accruing interest on current balances and are eligible for a new card. However, you will be charged interest at the normal APR on any remaining balance after the introductory period.
There are a few other key details to remember before you apply for a balance transfer card, including the following:
- You can’t transfer credit card debt between two cards from the same issuer. Banks offer balance transfers to entice customers from other providers — not as a service for their current customers.
- Some — but not all — issuers let you transfer debt from other sources, such as personal loans or personal lines of credit.
The amount of debt you can transfer depends on your approved credit limit on the new card. That credit limit is determined by your card issuer after they evaluate a range of personal and financial factors.
So even if you’re approved, you may only be able to initiate a partial balance transfer. Consider learning 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 aren’t eligible, there are other options. A debt consolidation loan typically allows you borrow from $5,000 to $50,000 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 — usually three to seven years.
What if I can’t make my repayments?
The major banks have all released guidelines and support packages for people affected by the coronavirus pandemic. Below, you’ll find brief summaries of what major banks are offering for credit card accounts.
|Provider||Credit card support during COVID-19 pandemic|
|American Express||Amex announced it will waive interest and fees for late payments for eligible cardholders of its personal and business cards. To see if you qualify, call 800-528-4800 or the number on the back of your card.|
Also, consider leveraging the American Express Financial Hardship program. If you qualify, Amex may offer lower monthly payments, waive late-payment fees, temporarily lower your APRs or guarantee your account won’t go past due.
|Bank of America||Bank of America has an online page explaining you can request a payment deferral for your card payment. You can also call the number on the back of your card and request relief such as waived payments, fees or interest.|
|Barclays||According to a Barclays spokesperson, cardholders may be able to skip a payment, get credit limit increases or have late-payment and cash-advance fees waived. See if you’re eligible by calling the number on the back of your card and speaking with a representative.|
|Capital One||Depending on your situation, Capital One may allow you to skip payments without incurring interest or have late-payment fees waived. Speak with a representative about your needs by calling the number on the back of your card.|
|Chase||Chase says it may waive fees, extend payment due dates or increase credit lines for eligible customers who have been affected by coronavirus. To see if you qualify, speak with a customer service specialist by calling the number on the back of your card.|
Find more information by visiting Chase’s coronavirus information portal.
|Citi||As of April 3, 2020, Citi’s coronavirus help page says customers may qualify for collection forbearance programs. This means you may be eligible for such measures as credit line increases or payment extensions, but the help you receive depends on Citi’s judgment of your situation.|
You can contact Citi by calling the number on the back of your card. Alternatively, you can message the bank in the Citi Mobile App.
|Discover||Discover advises calling 800-497-2816 or sending a message through your Account Center online if you’ll have trouble making your card payments. Depending on your situation, Discover may offer relief such as payment-date extensions and waived fees.|
Visit Discover’s coronavirus hub for more contact details and answers to frequently asked questions.
|Petal||At the time of this writing, Petal hasn’t announced coronavirus relief measures. The Petal® 2 "Cash Back, No Fees" Visa® Credit Card already has a built-in benefit: It doesn’t come with late-payment fees.|
Still, it’s not a good idea to miss payments, as Petal could still report your late payments to the credit bureaus. In turn, this will affect your credit score.
|PNC Bank||PNC Bank may allow you to postpone your credit card payment without incurring late fees. To see if you qualify, call 800-558-8472.|
There’s a comprehensive PNC Bank coronavirus-relief page that covers procedures for customers of various products.
|Synchrony Bank||Depending on your situation, Synchrony may waive fees or raise your credit limit for necessary purchases.|
The bank recommends logging in to your online account to request a credit line increase or chat with its virtual assistant. Alternatively, you can call the number on the back of your card to speak with a representative.
Find more information at Synchrony’s coronavirus help page.
|U.S. Bank||U.S. Bank says customers in financial hardship can rely on already-available options such as waived fees and increased credit limits, based on their need. It also says it may waive fees retroactively and let eligible customers defer payments.|
To contact the bank, call its assistance line at 888-287-7817. For more information, check out the U.S. Bank coronavirus information page.
|Wells Fargo||Wells Fargo may offer payment deferrals, fee waivers and other assistance, on a case-by-case basis, if you have one of its credit cards. Contact the bank by calling the number on the back of your card.|
You can stay updated with coronavirus policies by visiting the Wells Fargo coronavirus information center.
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, so it could take time. You may be able to visit a branch instead — but it’s worth checking your provider’s website for updates on whether branches are currently open.
You may also want to read our guide on what to do if you can’t make your minimum payment.
How can credit cards help my business?
Credit cards can come in handy if your business needs help managing cash flow. Depending on card type, you can get help with interest relief and working capital. A no-personal-guarantee card can reduce your risk. And a rewards card can help you pad your bottom line.
For more information, check out our guide on how a business credit card can help during coronavirus.
What if I need emergency funds?
The majority of coronavirus financial support packages focus on fee 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. Learn what your credit limit should be by reading our guide on the topic.
- Withdrawing cash. While you could use your credit card to withdraw cash from an ATM, this 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. Consider calculating the cost of a cash advance before going through with the transaction.
- Apply for an emergency credit card. Certain types of emergency cards are easier to be approved for, which may be especially helpful if your credit score isn’t perfect.
What if I booked travel using my card?
It is unlikely your trip will be covered by travel insurance, as most policies have general exclusions for pandemics. However, you may receive reimbursement in two scenarios:
- You or a covered travel companion fall ill from the coronavirus and must cancel.
- You receive medical advice from a doctor that you should avoid travel or cancel your itineraries.
We’ve written a guide that will help you determine if your credit card travel insurance covers you for coronavirus.
What will happen to my points and miles?
If you’ve been impacted by the coronavirus, you can typically get rewards back if you cancel award travel.
Under normal circumstances, airlines typically charge cancellation fees, meaning you’d still have to pay something to have your points returned. But as the U.S. continues to deal with the pandemic, most airlines have waived these fees outright for travel booked well through next year. And some, like Alaska Airlines, plan to do away with change fees permanently for certain classes of flights.
There usually aren’t any fees for getting hotel points back, but your ability to cancel depends on your booking reservation policy.
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 the reimbursement could take a few days to show up on your account. Another important detail: the refund won’t count toward your minimum payments.
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 how a credit card refund works or contact your provider to find out what’s possible.
What should I do with my credit card rewards during coronavirus?
This depends on a variety of factors. However, there’s a simple rule of thumb that applies in most cases: If you have cash back, redeem it as soon as possible. If you have travel points or miles, you’re probably better off keeping them until you’re ready to book travel again.
If you’re worried about your points or miles expiring, check out our guide on credit card rewards during coronavirus. Your loyalty-program administrator may offer extensions on reward expiration. It may also extend welcome-offer deadlines and the validity of perks such as travel credits, airline companion passes and free hotel award nights.
Will my elite status be affected?
This depends on which airline you have elite status with. Some international airlines offer elite status extensions. US airlines haven’t followed suit at the time of this writing, but Hawaiian Airlines says it will lower the mile and segment requirements to reach elite status in 2021.
You could get an elite extension depending on the hotel program. Eligible programs include those from such major chains as Marriott, Best Western and IHG.
Applying for a new credit card
This may be a time to consider different financial options, including a new credit card. If that’s the case, consider how you’d manage the account and payments to reduce the risk of ongoing credit card debt. You could start by plugging some numbers into this credit card repayment calculator or by figuring out what your credit limit might be.
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 check a card’s details before applying.
Low-rate and 0% purchase rate offers
If you want to use a credit card for upcoming expenses, a card with a low ongoing interest rate can help keep the overall costs down when you carry a balance from new purchases. You can also compare cards with 0% purchase intro APRs, with some offering up to 20 months interest-free.
Keep in mind you will still have to make repayments each month. And if you do get a 0% intro APR, any balance from your purchases that is left on the card at the end of the introductory period will attract a higher, ongoing purchase rate.
Credit cards for fair or poor credit
The best credit cards often require good credit scores. But if your score isn’t at that level, you might want to consider a card for fair credit. There are cards for bad credit, but your best options at this level are secured products that require security deposits. These won’t be the best choices if you’re in a cash crunch.
Instant approval credit cards
With an instant approval credit card, you’ll get your account information right away if you’re approved. This can help if you need access to credit to make purchases now.
While not all issuers offer this feature, you’ll find the benefit with such major issuers as American Express, Bank of America and U.S. Bank.
Should I apply for a credit card right now?
Getting a new credit card in this current situation comes with certain benefits and drawbacks. To answer the question, consider the following:
- Do you really need a new credit card? If your financial situation requires you to get a new card — say you need a 0% card to make purchases or pay off your debt — consider applying for one.
- Does your credit score allow for a new card? Having a good or excellent credit score gives you access to a better range of cards. If you have a less-than-perfect credit score, you may find it hard to get the card you really need.
- Can you afford a new credit card. You are exposing yourself to another line of credit. If you can’t afford to make repayments, consider whether a new card could be a benefit or a liability.
How could the coronavirus pandemic affect my credit score?
When it comes to your credit card, a missed payment or default could severely impact your credit score. This is no different to what would happen under normal circumstances.
If you’re struggling to make payments, speak with your card issuer to discuss payment relief. Your issuer may offer help such as waived fees, payment extensions or credit line increases. All of these measures may protect your credit score during COVID-19. Keep in mind that phone lines may be very busy, so consider using online contact methods if available.Back to top
If the coronavirus has been affecting your ability to manage your credit card, there are multiple avenues you can explore for relief. Contact your issuer to see if it can offer hardship adjustments to your account. Also, consider new credit cards if you’re relatively certain you can keep your debt from snowballing.
For more information about how to navigate these difficult times, visit our coronavirus hub. There, you’ll find articles on financial relief, steering your business, where to buy essentials and more.
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