Transcript for Expert tips for spending responsibly with credit
Finance experts usually warn people to use their credit card sparingly. During the pandemic, the rules have changed. If you have been hit hard during this time, credit cards may be a life-saving tool, keeping your family afloat. Here with is certified finance education instructor is bola sokunbi. Thank you for being here. Credit is their lifeline, so you have four tips to help us all spend responsibly, what's your first one? Yes, so the first thing you want to do is create a budget to track your spending. A big mistake people make when they're spending on credit, they'll spend and try to figure out the bill at the end of the month and this is not a good strategy because you can overextend yourself, so you want to give every dollar you have to spend a job to do and basically, by doing this you're able to create a plan as to not overextend yourself. You need to make sure you're good enough for the next month and next month. What's your second tip for everyone out there? My second tip is you want to make sure that you're able to make at least the minimum payments on your credit card. You want to focus on making those minimum payments so that you don't have negative marks reported to your credit report. The reason why this is important, because your credit can go into other aspects of your life, buying a home or getting a job. If it's easier to make small payments throughout the month, you can do that as well. It's important that you make a plan to at least be able to make that minimum payment each month. You want to protect your credit score at all costs. Lot of people had credit card debt going into this pandemic but you say it's possible to leverage credit with debt. So break that down for us. Yes, so many people are going through difficulties, have lost their jobs and they need to leverage debt in order to put food on their table. Despite already having debts. So what you want to do is understand what your minimum payment is on your existing debts and determine if you are to add on the expenses on to the core essentials how that changes your minimum payment. And you can leverage online calculators to help you determine what that minimum payment is going to be and when you get back on your feet, you can start working on a debt repayment plan. To pay off that credit card balance in full. Yes, this is great. Because planning is everything when it comes to these times. What's your final tip for everyone? What I'm hearing from people, I lost my job and I was unable to make my credit card payment. As a result my account got put into collections. If you're facing financial difficulty right now, you're unemployed, you don't want to wait for your account to get put into collections. You want to make sure that you communicate to your credit card company and let them you're facing credit card difficulties. They can plans in place to put you on a payment plan, they can wave late fees. They can pause making reports to the credit bureau. However, if you don't let them know that you're facing financial difficulties they can't help you. That's so good to know. Ask for help. Bola, thank you so much for joining us. We appreciate it.
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