How do I Manage Credit Card Debt While Unemployed?

Unemployment, no matter how dedicated you are to your job or the amount of time you have worked at your firm, can strike you at any time. In times of economic uncertainty, extended unemployment may occur even if you search for another job vigilantly. Most financial institutions understand the devastating effects of your loss of income, and usually will work with you to manage and control your credit card debt. Unemployment does not have to destroy your credit rating.

Instructions

1

Pay the minimum monthly amount on your credit card; this allows you to maintain your credit rating, prevents interest rate increases, and eliminates the possibility of credit companies seizing assets or bank holdings. There are no negative consequences on your credit rating when you pay the minimum payment. Depending on your credit rating, a bank may work to lower your monthly payment temporarily.

2

Consult a debt-management program to assist you in consolidating your credit card debt. There are many non-profit organizations that will work with you if you are unemployed and cannot make your financial obligations. Debt-management companies will negotiate on your behalf, as well as create a modified monthly budget for you to follow. These non-profit organizations may also work to lower your monthly minimum payment and interest rate. Instead of paying your financial institutions, you make payments to the organization assisting you with your debt.

3

Avoid putting more money on your credit card while you are unemployed. Creditors and financial institutions react negatively when you place more than 30 percent of your available credit on your credit cards. Additionally, these institutions can track if you are placing groceries and other day-to-day items on your credit card continuously. Banks and lenders may choose to raise your interest rate or lower your available credit limit when they find this activity.