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So you recently lost your job? Becoming unemployed is scary, to say the least. You’re not sure when you’ll find employment, and you may not receive unemployment insurance payments for weeks — or even months — after you first apply.

It’s easy to mishandle your credit cards during this stormy season. You may be tempted to keep up your regular lifestyle by tapping into a line of credit. Or maybe you’re worried about just making minimum credit card payments.

Before you dive into more debt or freak out about missed payments, check out these six credit card tips for the unemployed:

1. Revamp Your Budget

Before you even touch your credit cards, work out your survival-mode budget. Strip away anything unnecessary — even small luxuries like the occasional coffee or your Netflix subscription.

During normal times, these small expenses aren’t going to break your budget. But during unemployment, you want to free up every single dollar that you possibly can.

2. Spend on Priorities First

Once you’ve got a budget, prioritize it. Start by spending on the most important things first, and leave the less important things for last. If you have a bit of money left over after all your expenses, then you can afford to add in a few of the extras you just cut out.

With a prioritized budget, you’ll want to start with food, utilities and shelter. Then, be sure you have access to transportation so that you can search for and take a new job. After that, factor in things like minimum payments on your student loans and credit cards, necessary clothing, and other essentials.

Spending in a prioritized order can be tough. What if your credit card or student loan bill is due at the beginning of the month? You may need to wait to pay it until you’ve taken care of items that take higher priority. However, creditors may also be willing to work with you during this challenging time (more on this next).

3. Contact the Credit Card Company

If you find that you do have to let a credit card payment go late because of your newly-prioritized budget, don’t do so without calling the credit card company first.

Creditors can be surprisingly helpful if you’re forthcoming about your situation. You may be able to negotiate a lower, more manageable minimum payment. Or you could get your payment due date changed to better suit your current circumstances.

They key is to call your lenders — even non-credit-card lenders — before you miss any payments. This way, they know you’re working actively to make good financial choices. They’ll be much more likely to help if you make the first move.

4. Check Your Available Assets and Credit

As you’re making your budget, look to see what assets you have available in savings or even investment accounts. Carefully consider when you’ll use these assets — if at all.

Your best bet is to let your assets alone, if at all possible, until you don’t have any choice but to tap into them. After all, that’s what an emergency fund is for!

Look at the credit you have available to you. Credit can make a decent emergency fund in a pinch, if you aren’t paying outrageous interest. But you need to use your credit as sparingly as possible (to avoid finance charges later). And keep an eye on your balances, to ensure you don’t incur any over-limit fees.

Carrying a balance that is 30% or more of your available credit can also lower your credit score, so be aware of that, too.

5. Know Your Credit Card’s Terms

Before you go charging up debt assuming you’ve got a low interest rate, double check. And be sure to check your credit card’s terms on things like over-limit fees and cash advances.

A cash advance may seem like a good way to get quick access to cash to pay bills that you can’t use a credit card for. But cash advances usually come with hefty fees, often between 2-5% of the amount borrowed, plus a high interest rate, often 20% or more. So you want to avoid going this route if at all possible.

Some credit card companies will issue you checks that you can write, so you can pay bills that can’t be paid directly by credit card. Keep in mind, however, that these “convenience checks” are considered cash advances, and the fees and interest will apply, so use them wisely.

6. Strive to Make Minimum Payments

Once you work through all these steps, you may be better able to make your credit card’s minimum payments than you’d thought. So make that a priority, but take care of your essential needs first.

And as your situation changes, be sure to keep your credit card company in the loop – including if you can’t make minimum payments. Even if you’ve already negotiated once, it doesn’t hurt to call again if your situation worsens.

[Editor’s note: Even though your first priority is shoring up your finances so you can stay afloat during this time, it’s still important to monitor your credit, and use that as a reminder to use your credit responsibly even in an emergency. There are many ways to monitor your credit scores for free, including through Credit.com, where you can also get a plan to build your credit.]

More on Credit Reports and Credit Scores:

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  • Graham Bradford


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