4 credit card tips for families affected by the government shutdown
Start by reviewing your spending to cut nonessential recurring charges, and charge everyday expenses on a 0-interest card
whose work has appeared in TheStreet, Mic and elsewhere
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With the latest government shutdown dragging on longer than anyone would have anticipated, 800,000 federal workers and their families – including mine – are looking for ways to ease the financial burden.
As a member of a federal family – my husband is a federal public defender – I’ve endured about three shutdowns in the past, plus a federal sequestration in 2013.
Each time the government has shut down (or during the sequester), my family has had to figure out how to financially float until the government reopened.
This is what I learned, specifically when it comes to credit cards.
1. Use 0-percent rewards cards to make purchases
In the past, I’d deplete my checking account paying for groceries, vet bills and haircuts when I should have been just charging it on my rewards credit card.
Using a rewards credit card over a debit card is a smart practice in general because it allows you to earn cash back or travel rewards for making everyday purchases.
Of course, especially during the shutdown, you want to be conservative with your spending. But for those must-have expenses, like food, you may want to turn to a low-interest rewards card.
You may also want to use a no annual fee rewards card to avoid running into any high annual fees, especially if your paycheck isn’t always a given.
Also, you won’t want to be paying a tremendous amount of interest when the bill comes due.
If you have a good credit score, consider applying for a balance transfer card with a long 0-percent offer. A balance transfer card with a generous intro offer would allow you to pay no interest on balances and/or purchase for a year or longer – but you'll still have to make at least minimum monthly payments.
See related: Should you use a credit card as your emergency fund?
2. Call your credit card company
If making your credit card payment this month looks bleak, consider reaching out to the credit card company to let them know you are a federal government employee who is not getting paid due to the shutdown.
Most lenders are waiving late fees for federal workers as the shutdown drags on. For example, Provident Bank announced it will waive mortgage and credit card late fees for those hit by the shutdown, according to CNBC.
Chase Bank is encouraging credit card, mortgage and auto loan customers who are hit by the shutdown to call and let them know they are impacted.
“We’re here for our government worker customers whose pay may be disrupted,” Thasunda Duckett, CEO of Consumer Banking at Chase, said in a statement. “We all hope this will be resolved soon.”
Chase customers should discuss waiving or refunding late fees, plus they should make sure the shutdown won’t impact their credit history.
3. Slash recurring charges if possible
Many federal workers are already masters at budgeting. And most are keen to what kind of recurring charges are hitting their plastic every month.
However, it can be easy to forget about agreeing to a recurring charge for your child to play Roadblocks online, for instance. Or you keep meaning to cancel that reoccurring charge for a gym membership, but forget.
- Go to your credit card’s portal and review your statement to identify charges, even small ones, that can add up to a decent amount.
- Then contact the companies that are charging you immediately to cancel the service.
- The cancellation may not hit until the following month, but every small amount helps, especially when you are playing catch-up once the government reopens.
I’ve currently identified at least $50 in recurring charges I can live without.
See related: 6 free tools to stop recurring card charges
4. Consider a zero-percent loan to cover credit card balance
In the event your credit card company won’t work with you, another option is to explore a zero-percent loan offered by a growing number of credit unions throughout the country.
- Before you can qualify for a loan, you must become a member of the credit union.
- Plus you should explore requirements, too. Some credit unions require members have direct deposit to qualify – and terms vary.
Banks are also addressing the need for loan coverage too.
For instance, Stockman Bank is offering to help federal employee customers restructure debt.
“Your credit card bills from the holidays, another month's house payment are going to be coming up here quickly, those kinds of things, and I think that just is going to make the situation worse the longer it goes,” Stockman CEO Bill Coffee told Montana Public Radio, according to American Banker.
Remember: You have options
This shutdown has made history as being the longest the country has ever endured, and federal workers are holding their breath, waiting to see which side will blink first.
From figuring out how to meet child care payments and care to just putting food on the table, thousands of families like mine are under the gun with virtually no end in sight.
However, reviewing expenses, reaching out to financial institutions for help and making smart use of credit cards can help families affected by the government shutdown lessen the effects of the impasse on their economy.
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