How to manage credit card bills during coronavirus

In times of economic strife, a little credit card due diligence goes a long way. (iStock)

There’s good news and bad news on the credit card debt front during COVID-19 - Americans are doing a good job paying down their credit card bill during the pandemic.

According to the New York Federal Reserve, U.S. credit cardholders paid down a whopping $82 billion in card debt in the second quarter of 2020. Yet the U.S. unemployment rate hovers at 10.2 percent, 6.5 percent higher than a year ago.

With so much financial uncertainty in play, credit cardholders would do well to keep steering a course to the lower plastic debt during the pandemic. The good news is that financial consumers seem up to the job. And Credible can help you navigate credit cards with free online tools.


“I’ve successfully managed my credit card debt during this pandemic,” said Carol Tompkins, a business development specialist at UK-based Accounts Portal.

Tompkins said she focused on two primary card issues, which led to a positive outcome:

  • Leverage credit relief. “I made use of the credit relief program that my bank was offering,” Tompkins said. “Certain fees were waivered, which left me with a more manageable financial load.”
  • Paying on time. Tompkins also said she’s been paying the monthly minimum on all of her credit card debts. “I do this every month on a timely basis,” she said.

Credit industry data shows that even one late credit card payment (30 days and later) can adversely affect your credit score.

Start with the basics

Money management experts say that any credit card debt management campaign, especially one launched during the midst of a pandemic, should have a strong household finance-based foundation.

“Every individual and household should have a budget in place," said Sean Fox, co-president of Freedom Debt Relief in San Mateo, Cal. "It’s important at any time, but both short-term and longer-term budgets are especially important right now.”

The purpose of a robust household budget is not to restrict spending, but to serve as a tool that helps guide your spending so you can achieve what you really need and want. To make sure that happens, carefully set goals (with your spouse and/or family) that are mandatory, with these priorities in mind.

  • Debt management. "Make sure to pay for all necessities (like food, clothing, and shelter) first,” Fox advised. “That includes paying the minimum on any secured debts, like a house or a car. If you miss a payment, you increase the chance of losing the asset.”
  • Credit card debt management. Then, work on paying down credit card debt, Fox said. “At today’s rates, paying it off effectively produces a 15-20 percent return, which represents significant savings.”

When focusing on credit card debt, Fox advised leveraging any financial help you can get from lenders.

“Many card providers are open to changing credit terms, with most assistance right now in the form of setting up payment plans, deferring payments, or waiving interest – that’s versus eliminating debt,” Fox said. “Check to see what is available and how you can use any help to work out a debt-elimination strategy.”

Zero-percent credit cards or even personal loans can also help card consumers hit the reset button and refresh their credit card experience.

Find good deals on both personal financial tools on Credible, where you can compare offers in minutes.


Get creative with credit card management

Now is also a good time to understand – and avoid – the behaviors that lead to negative financial outcomes in times of crisis.

According to Michael Hammelburger, chief executive officer at the Expense Reduction Group, a financial services firm in Baltimore, Md., the following credit card mistakes should be avoided at all times, but especially when household finances are in such a precarious position.

  • Using the credit card all the time. “Not having the self-control to (make) purchases using your credit card is dangerous,” Hammelburger said.
  • Using the credit card when you have a revolving debt or just paying the minimum monthly payments. “Generally, shoppers feel the pressure to add to their credit card balance during this shopping season,” he noted.
  • Withdrawing from your retirement fund. “If withdrawing has become a habit, you'll be more tempted to repeat it a couple of times for expenses that are unnecessary,” Hammelburger said.
  • Losing track of one's spending. “For every purchase made (whether inside the store or online), you fail to keep tabs and as a result, you spend way beyond your budget,” he noted.


How can credit cardholders recover from card mistakes? Hammelburger has some thoughts on that front, too.

  • Organize all credit cards. Hammelburger keeps “a ton” of credit cards in his wallet. “I’d really like to get rid of those credit cards that I don’t use regularly,” he said. “Those cards with limited rewards, high annual fees, and even poor customer support hotlines are getting the cut.”
  • Stick to your pre-pandemic budget. “Try to plan ahead with your purchases and help you budget for every gift, travel, apparel, and even charitable donation that you make,” Hammelburger said.
  • Save 5-10% of your salary and put it into an interest-bearing account. “Investing in smaller amounts but at a consistent basis is more important and fruitful,” he added.

One last tip – protect your credit

Guarding against any dents or outright breaches in credit scores should also be a priority for cardholders. That’s because a good credit score gets a financial consumer better deals – and better interest rates – on their plastic.

“The pandemic has wreaked havoc on many people’s personal finances and likely damaged many credit scores,” said Andrea Woroch, founder of the personal financial site

Woroch advises using mobile financial apps like Self to build credit while you save money.

“Instead of getting money upfront, you make payments toward Self for one to two years, depending on the term you chose,” Woroch said. “They report your on-time payments to all three credit agencies to help you build credit. At the end of the term, your payments unlock in the form of savings.”