The isolation that we are forced to respect to avoid the spread of Covid-19 has altered our day to day and, above all, our finances. Household income has been affected, while living expenses have been increasing.

Whether you’re out of work or on hiatus from the pandemic, a credit card can be a very useful tool for resolving emergencies. But how can we avoid getting out of control and ending up full of debt?

Here are some recommendations to keep in mind when buying with your credit cards during a crisis.

Check your credit cards

First of all, check which cards you are using and what they might be useful for in the midst of the crisis. Credit cards are a great tool right now and allow you to buy now and pay later what you need to survive and face any medical emergency that may arise. But, if possible, use the one that offers you the most benefits and dispense with the others. This way, you will avoid accumulating debt.

Buy the essentials

At this time, consumption should be limited to the most essential. Food and health care are priorities. We must only spend on food, medicines if we need them, and on our health service. Other types of expenses are totally unnecessary in these circumstances. In addition, we recommend that you fill your pantry and your refrigerator in advance and in a responsible way, so you will be prevented in case of shortages.

Make sure of your ability to avoid debt

A credit card does not add more money to your income. What you buy with it you must pay sooner or later, so you must be sure of up how much you can pay monthly. The most advisable thing is that you do not spend more than 30% of your income. This way, you do not compromise the budget that you have destined for your basic expenses such as food, rent or utilities.

Ask for the interest rate

Either by phone or online, ask for the interest rate on your credit card, which in other words, is the cost of your credit. Since the amount, you must pay increases directly according to the interest rate. If you see that later on, it will be difficult to pay the debt, it is recommended that you look for a card that offers you a lower interest rate.

Use the card after the court date

When you use the credit card after the cut-off date, you have approximately fifty days to pay. This date is assigned by the bank after adding all the expenses you had in the month. In this way, you can take advantage of all that time to save and pay in time.

Without a doubt, credit cards are a very useful alternative in these times of crisis and mandatory isolation. If you take into account these recommendations, especially planning what you are going to buy, pay your debts on time and know how much you are willing to pay, you can take advantage of the benefits that credit cards bring.

Are you drowning in credit card debt?

Although my first formal job was as a credit card salesperson, and I knew exactly how they work, I quickly got caught up in them. I came to think that it was normal to have debts and that the only way to have something was to buy on credit.

Once we have recognized that we have a problem and decided to fix it, the next step is to know the exact financial condition we are in before proceeding to debt repayment. For this, we must make a complete list of all the debts we have, both legal (signed in contracts) and honorable (loans to family and friends made with our word).

This list of credit card debts must include all possible information, at least:

• To whom is owed (name of institution)
• The total amount owed from each
• Minimum monthly payment
• Annual interest rate
• Contact person.

Create an action plan

When we have the complete list of debts on paper, it is necessary to implement an action plan that allows you to take steps to get out of debt. This action plan is made up of no more debt. Otherwise, all other efforts will be useless.

Generate surpluses to be used for debt payment; some ways are:

• Minimize expenses. The higher the commitments, the stricter you must be in spending money.
• Increase income with secondary jobs, overtime, etc.
• Sell ​​assets that can speed up our debt payment process.

Make the credit card debt payment plan as follows:

• The list of debts order it from the lowest debt to the highest
• Negotiate with creditors to have the lowest monthly payments.
• Pay the monthly minimum of all debts and the surplus we have generated and pay it to the smallest debt.
• By paying off the smallest debt in full, we add what we paid to the next smallest debt.
• So on until all debts are paid in full.
• When you finish paying all the debts, the money used to pay debts must now go to savings.

Once you have managed to pay all your credit card debts, you must promise not to acquire another debt. That simple promise will make you live a debt-free life, which is no small thing today.