COVID-19: Hard questions, real answers on credit cards, unemployment and your finances

a man carries a basket filled with bags of food
Fargo-Moorhead transit driver Alpha Diallo carries a basket of meals to his van in Moorhead, Minn., on March 31, 2020. COVID-19 has introduced new financial challenges and exacerbated others for millions of Americans.
Dan Gunderson | MPR News file

The global coronavirus pandemic has hit close to home, raising questions for Americans about the status of their pocketbooks.

During a recent national conversation co-produced by MPR News and Marketplace, host Kerri Miller talked with Michelle Singletary, a personal finance columnist at The Washington Post, and Marketplace correspondent Kimberly Adams. Listeners called in to share what the pandemic has meant for their lives and what personal finance questions are keeping them up at night.

Here’s a selection of the personal finance advice Adams and Singletary gave callers:

  • It's OK to just make the minimum payment on credit cards right now. Singletary said that advice may go against what everybody has learned — that paying credit cards down in full every month is the goal. But she says people are going to need to preserve their cash, especially those who have lost income. “These are extraordinary times,” she said.

  • Avoid taking out a credit card advance or payday loan. Singletary urges people to view these as an absolute last resort, especially given the high interest rates associated with them.

  • If you don’t file taxes, there still may be an opportunity for you to get a stimulus payment. Singletary reminded listeners to check out the Internal Revenue Service’s website. On its page dedicated to the economic impact of the pandemic, there’s a post focused on nonfilers. Singletary said people will be able to determine if they qualify and can enter direct deposit information. Adams added those who have filed taxes and already had direct deposit set up will receive checks first.

  • Don’t let pride stop you from filing for unemployment right now. You might think someone else needs it more than you. You might think you can hold off for a bit. But Singletary said don’t wait. For one, it can take time to put in an application and get it through the system. Plus, she said, if you lost your job, you’ve earned unemployment. “This is not a handout. This is a benefit that was put in place for just this kind of thing,” Singletary said.

  • Take advantage of free online career resources, especially if you have extra time. If you’ve lost a job or have had hours cut, it’s a good time to work on your resume, complete training courses or otherwise boost your skills and knowledge. Adams said some colleges and universities are offering free online courses or sample courses. “This is a moment to take advantage of a lot of free resources,” she said.

  • Is now the time to buy a house or a car if you were planning on it or need to? Singletary’s advice is to hold off right now: “This is not the time to be going out and spending a lot of money for homes and cars and stuff if you don’t have a job, you’re not sure about your income coming in.”

    Meanwhile, Adams added that it’s worth remembering that the mortgage lending environment has drastically changed in just the last few weeks. “Banks, with good reason, are looking really carefully at each new applicant to see, are you really going to be able to pay this mortgage given everything that’s going on?” Remember — this also comes at a time when banks are seeing record numbers of people requesting forbearance.

  • Talk to your mortgage lender or landlord about payments. All federally backed mortgages are eligible for forbearance, where homeowners can defer payments, Singletary said. If a person is experiencing financial hardship because of the pandemic, the CARES Act grants up to 180 days of forbearance, which can be extended for another 180 days. Interest doesn’t stop during this time, but fees and penalties would be waived. Singletary also said if your housing lease is up, ask your landlord if you can set up a month-to-month arrangement, especially if now is a bad time to move.

  • Watch for additional help that may be coming from the federal government. Remember — in terms of legislation, the CARES Act came together very quickly. Adams said there’s another piece of legislation to watch for that’s likely to include fixes to the Act and even additional stimulus for those who have lost work. “I would encourage everyone to keep your documentation, keep track of everything that’s going on,” she added. “Just because you might not be eligible for something at this very moment does not mean that in a later piece of legislation or under future regulations that there won’t be something that kicks in retroactively.”

To listen to the full conversation you can use the audio player above.

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