OVER the past few months, our lives have been dominated by Covid-19.
For those of us who have been able to continue working, there have been some positive sides to staying home. Indeed, when we polled our Instagram followers, 70 per cent of you said that you had been able to save money during lockdown.
However, for some of our readers the pandemic has meant financial difficulty.
Whether you’re ill, furloughed or have lost your job, there are lots of factors which can have a negative impact on your finances.
From wondering how best to use the cash you’ve saved up, or being concerned about how to pay your credit card bills with a reduced income there are lots of questions out there and the information on the internet can be confusing and sometimes misleading.
Luckily, we’ve teamed up with Barclaycard for our Card Smart series which aims to help you make the most out of your credit card.
In this edition, we answer some of the most common questions around Covid-19 and your credit card.
What do I do if I can’t pay my credit card bill?
If you’re unable to pay your credit card bill because of a reduced/non-existent income as a result of Covid-19 then you’re probably worried – but there is help available.
Just like with your mortgage, you’re able to request a payment holiday from your provider.
If you feel like you need help, then it’s really important that you contact your provider and ask for it – if you’re struggling due to Covid-19 it’s FCA guidance that they should help you.
For most providers you’ll need to request your payment holiday by 9 July 2020 and it will mean that you do not need to make any payments towards your credit card for three months.
It’s important to remember, though, that although your payments have stopped you will still be charged your usual interest rate during this time, which means that you could end up paying a higher monthly payment when your payment holiday is over. So, if you feel like you can comfortably continue paying your bill during this time then you should do so.
What do I do if I lose my job and my financial circumstances have changed?
If your financial circumstances have changed for the long term, then a payment holiday may not be the best solution.
You should still contact your provider and explain your situation. If a payment holiday doesn’t seem viable then they should be able to work with you on a longer-time payment plan or solution.
Is it safe to make big purchases on my credit card during the pandemic?
A few weeks ago we asked you whether Coronavirus had changed the way you were spending on your credit card and 70 per cent of you said you were spending more.
If you are confident you can afford the repayments going forward and you can make them on time then there shouldn’t be a problem. Setting up text alerts can help as a reminder so you don’t miss your payment due date. After all, all the days are merging into one during lockdown and it can be hard to keep track!
In fact, if you’re making a purchase over £100 then it may be better to pay using your credit card as this affords you special protection under what’s known as “Section 75 of the Consumer Credit Act” rules.
These mean that your credit card company is equally liable alongside the retailer if the item you buy isn’t delivered or does not match its description.
The protection only applies to purchases over £100 and up to £30,000.
I have some extra money because my spending has gone down – is it best to save this or use it to pay off my credit card?
If you have extra cash then it’s always good to pay down your debts. The quicker you pay off your credit card, the less interest you’ll pay.
Why not use a repayment calculator to work out how much you could save by making larger repayments.
For more information, click here to head to the Barclaycard Money Matters hub.
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