Ways to pay your credit cards amid the pandemic

If you are one of the approximately 110 million Americans who have debt Credit cards during the Coronavirus pandemic, you may be wondering how you can pay your bills during this unprecedented economic crisis. While debt is always stressful, it's even more difficult to manage in these uncertain times when millions of people are losing their jobs or are temporarily laid off.

If this applies to you, it may seem like the road to debt freedom is harder to achieve than ever before. It is important to note that whatever debt reduction strategy you choose, now is also the time to approach your issuer to explain your financial situation.

Debt reduction strategies during an economic crisis:
1. Apply for a balance transfer credit card.

You may be wondering, "How can applying for another credit card solve your debt? Credit cards?»

While it may seem counterintuitive to apply for a new credit card when battling high-interest credit card debt, it's important to note that a balance transfer credit card offers several benefits that can help caregivers struggling with the debts.

A balance transfer card that allows you to transfer a balance with a high APR to a new account with a predetermined introductory period of low or no interest, sometimes up to 21 months. The benefits of a balance transfer card are undeniable. With a 0 percent APR add-on period, it's easier to address debt through manageable monthly payments without the burden of additional interest. If you have a high balance on your credit card that you can't pay off, a balance transfer may be a good option for you.

It's important to know that with most balance transfers, you won't be able to transfer a balance within an issuer's network. For example, if you have a high balance on a Citi credit card, you won't be able to transfer it to another Citi card.

2. Snowball method
If you are looking to deal with the debt of your Credit cardsHigh interest rate without opening a new line of credit, snowballing debt may be a good debt reduction strategy to try.

The snowball method is simple: You zero in on the smallest debt you have (regardless of APR) and work to pay off that debt as quickly as possible. Once you've paid off the smallest balance, you start concentrating on the next smallest balance. You continue this process, while making the minimum payments on the accounts you are not concentrating on, until you have eliminated all debt from your Credit cards.

Perhaps the greatest benefit of the snowball method is that it allows you to see the progress being made in reducing your debt. If you're making scattered minimum payments to multiple streams of debt, it may seem like you're never making progress toward debt relief. However, if you start with your smallest debt, you will quickly see the results of your effort as the balance dwindles.

What to know if you plan to use the debt snowball method:
One downside of the debt snowball is that it doesn't take interest rates into account when paying down debt. If you snowball debt and tackle smaller balances first, regardless of interest rate, you risk spending more money on interest in the long run.

3. Avalanche method
Unlike debt snowballing, the debt avalanche method focuses on paying off the balances with the highest interest rate first, and then successively paying down the remaining debt in the order of the highest interest rates. high to low.

The avalanche method allows you to tackle high-interest debt first, which can help you reduce your total debt and added interest over time. However, as with the snowball method, the debt avalanche will only be effective if you continue to pay the minimum balance on all accounts while prioritizing the balance with the highest interest rate.

Read More: Things to consider before taking out the credit card

What to know if you plan to use the debt avalanche method:
The debt avalanche is an effective method to reduce the debt of the Credit cards, and by prioritizing the balances with the highest interest rates it can save you the most money in the long run. However, one drawback of debt avalanche is that you don't see the same quick results as with the debt snowball method. Paying off balances based on interest rates requires patience and can be difficult to maintain if you have multiple accounts with high balances.

final thoughts
If you, like so many Americans today, entered 2020 with debt of Credit cards, the stress of keeping up with your bills during the Coronavirus pandemic can seem overwhelming. Following a debt reduction plan like the avalanche or snowball method is a good way to both keep your finances in order and see results as you work to reduce your overall debt.

However, if you are facing extreme financial hardship, you may not be able to make even the minimum payments on your debt with Credit cards. If this is the case, methods such as the debt snowball or debt avalanche may not be realistic as they aggressively prioritize