The rapid spread of the coronavirus, also known as COVID-19, in the United States can be frightening and confusing. In Texas alone, at least 50 cases of infection have been reported by mid-March.
During these trying times, acting irrational is human nature. However, you can’t afford to make too many financial mistakes. When this pandemic blows over, you do not want to resume your normal life with poor credit scores and high levels of debt.
If you are going to depend on your plastic more or apply for a signature loan in Wichita Falls, Iowa Park, or Burkburnett in the foreseeable future, use the pieces of advice below to use credit wisely and keep it from backfiring on you.
Due to fears of contracting COVID-19, people are flocking to groceries to buy essentials like it is the end of the world and planning to stay at home as much as possible. Although it is prudent to stockpile food and other basic necessities, understand that panic buying is not the answer. You might even waste your money on large amounts of commodities that you really do not need.
Any sane financial expert will advise you against buying foods you do not normally eat and fancy cleaning items when regular ones will do. Also, stay away from expensive HVAC filters with no capability to stop the entry and spread of coronavirus inside the house, let alone kill it.
If you need to seek funding for whatever reason, try to process your application over the Internet. You must avoid any form of social interaction as much as possible, so do not visit brick-and-mortar offices unless you absolutely have to.
Do Not Over-Borrow Funds
Cash may usually be king when there is economic uncertainty, but it is unwise to borrow an excessive amount of funds. Understand that they have to be repaid, so you stand to lose more money if you are just going to hide them under the mattress.
If you want to beef up your emergency fund, do not touch your savings. Be mindful of your purchase decisions from here on out to set aside more cash for your nest egg instead of abusing credit to magically erroneously increase your cash reserves.
Understand the Loan’s Terms
It is imperative that you observe punctual payment, for delinquency-related items in your credit file will surely pull down your credit scores. If you are taking out a loan, make sure you know how much you need to pay and until when you can repay what amount to avoid receiving a credit ding.
Settle Balances in Full
Paying just minimum balances, especially in credit cards, has no negative implications with your credit. However, interest is usually applied to unpaid balances, causing your debt to snowball as long as the bills are not zeroed out. Settle everything in full if you could to minimize your overall expenses.
Dealing with the effects of COVID-19 on your life is much harder without easy access to cheap credit. The pandemic is not an excuse to live dangerously; rather, you ought to manage your finances wisely to avoid worsening the situation for yourself.