Credit Card and Natural Disaster

Protecting Your Credit When Natural Disasters Hits

In recent weeks the United States has been hit with several natural disasters, leaving Americans uprooted from their homes and their employment. Texas and Florida are dealing with the aftermath of flood and rain waters from Hurricane Harvey and Hurricane Irma, while the Western United States is dealing with the complete opposite dry and extreme conditions causing widespread forest fires.

In the wake of a natural disaster such as the recent hurricanes and wildfires, you may be wondering:

    • What if I use my credit cards or max them out?
    • What If I miss a payment?

What if I use my credit or max out my credit cards?

Rebuilding your home or life after a natural disaster can be overwhelming mentally and financially. Natural disasters like the recent events in the United States will require many Americans to start over completely, even with insurance money, government grants and any nest egg you have built you may still need to use your credit cards. We do know that the area we reside is not part of what makes up your FICO credit score, but using your cards and or maxing them out may affect your FICO Score. One of the first things you should do is pull your credit report, pulling your credit report will give you a complete picture of your credit profile at the time the natural disaster hit.

What If I Miss A Payment?

Missing just one payment could damage your credit significantly and could lead to not being about to obtain credit when it is most needed. If your house has was destroyed, make sure you cut off costly services, such as Wi-Fi and cable or electricity. This would be a perfect time to look at your budget and create a post-disaster budget; this budget should be a bare-bones budget. Once you created your budget and determined the amount, you can pay each creditor, call each creditor and discuss your options.  Depending on the credit card company and their situation they may offer you long-term or short-term options, may waive late fees or offer assistance programs.

A Few Companies That Are Helping

If you are your family or friends have been affected by a natural disaster here are a few companies that have resources for you. The information below is directly from the companies listed web pages, please visit the links to see more information.

Wells Fargo 1-800-869-3557

We know this can be a stressful time financially, so we are committed to giving affected customers additional support. Here are the ways we’re proactively helping customers in FEMA-declared areas (customers impacted by the hurricanes outside these areas are also encouraged to contact us):

  • Reversing certain fees — such as late fees — for our lending products, including credit cards, auto loans, personal loans, and lines of credit.
  • Waiving Wells Fargo fees for customers using non-Wells Fargo ATMs.
  • For Credit Card customers, providing payment relief and suppressing any negative credit bureau reporting for 90 days.

Citi Cards 1-800-950-5114

Customers in FEMA-designated disaster areas may be eligible for assistance such as:

  • Automatic waiver or refund of late fees on credit cards;
  • Automatic waiver of monthly service fees on Citibank deposit accounts;
  • Automatic waiver or refund of late fees on personal loans and lines of credit;
  • Deferred minimum payments on credit cards;
  • Emergency credit line increases;
  • Waived early withdrawal penalties on CDs and wire transfer fees;
  • Waived late fees for September mortgage payments; and
  • Mortgage payment forbearance programs.

Chase Home Lending 1-888-356-0023

First, for all customers who live in a FEMA-designated individual assistance disaster area, we’ll pause the obligation to make mortgage and home equity payments for 90 days from when the hurricane first hit (a 90-day grace period).

Credit Invisible and the Catch-22

“Credit Invisible and the “Catch-22” – Credit Law Center

Establishing good credit in this day and age plays a significant role in becoming financially secure. However, there are still 26 million Americans that are still “credit invisible” under the traditional FICO scoring model.If you are one of the 26 million Americans that are “credit invisible” you may already know the challenges that this credit status may bring.

“Credit-Invisible and the “Catch-22.”

“Credit-invisible” can be looked at one of two ways, one you have the ability to start building your credit and establishing an excellent credit history. The “catch-22” finding lenders who will extend a credit card or loan to you may be difficult. Many lenders will consider you a risk because you don’t have a history to prove you are credit worthy. With the extraordinary amount of Americans in this current situation, there is a significant focus in this area and research being done to look into to alternative data, (rent, utilities, and cell phone bills) to prove a consumers credit worthiness.

In a recent study by the CFPB, states that consumers who transition out of being “credit Invisible” most consumers do it before the age of 25. However, statistics have shown individuals that achieve visibility after 25 reside in low to moderate income neighborhoods. Out of all the age groups and income levels, credit cards seem to be the fastest way to start creating a credit visibility.

It’s not a secret that the more money we make, the easier it is to pay our bills, but did you know that your salary could be making you “Credit Invisible?” Low-income consumers are 240 percent more likely to start your credit profile with a debt collection or a public record. In the CFPB’s most recent study they found that the consumers residing in lower-income areas are more prone to become credit visible due to negative items reporting on the consumer’s reports.“Today’s study shows that even at the beginning of their financial lives, they are faced with higher hurdles to gain access to credit, which hinders them from turning their version of the American dream into reality,” said CFPB Director Richard Cordray.


Ways to Become Visible

1. Obtain a secured credit card
2. Apply for a CD Credit building Loan.
3. Have someone add as an authorized user.
4. Make all your payments on time.

If you are looking for a credit card that fits your needs check out FREECREDITHUB.COM

Pay off Credit Card Debt Faster- Credit Law Center

Tips to Pay Off Credit Card Debt Faster- Credit Law Center

Carrying credit card debt isn’t uncommon for Americans, according to a recent report by ValuePenguin, Inc 38.1% of Americans carry some credit card balance. When it comes to paying off credit card debt, one recurrent question is how to pay it off the faster. Every household has their unique financial situation and personal goal, so there is not one particular strategy that works best.

Evaluating your financial situation and determining what your hopes and dreams are. Once you have figured out what goal you are aiming for is, then you will be up to come up with the best strategy to be the debt off the fastest.

Pay Down the Credit Card With the Highest Interest

Card statements are required to have the interest, finance charges and the monthly charges. The first step would be to gather all your monthly card statements and compare the interest rates and finance charge. Determine which card has the highest rate and start with paying that one down first. You will want to make sure you budget an amount greater than the minimum monthly payment. An important factor in paying down the cards faster is sticking with the higher amount. If you choose to pay $200 a month, make sure you pay that even when the minimum payment goes down.

Pay the Card With the Lowest Balance First

If you are a person who does well with checking items off a list, this option may be beneficial for you. For some, it is easier to stomach paying a card with a $600 over the card with the $2600 balance. By choosing this strategy and paying more than the minimum balance you will see results quicker. Paying the lowest balance first is a great option if you need to see light at the end of the tunnel faster.

Consolidation of Credit Card Debt

As mentioned earlier each situation is different, and there is no right or wrong way. Many consumers have multiple cards with a significant amount of debt, and their credit card debt can quickly spiral out of control; Americans are tempted at just about every store to sign up for savings. If you have signed up for many different accounts and racked up a significant amount of debt consolidating them may be an option for you. Obtaining a consolidation loan from your bank or credit union to pay off the balances and leave you with just one monthly payment and less interest.If your budget allows you to pay more than the monthly payment it is wise to do so.

Don’t Forget How You Ended Up in Debt

Credit cards are an essential factor in building your credit score, however making sure you use them correctly is key. Keep in mind how you got into debt in the first place and always remember what your goal is. If your goal is to buy your own house, or a new car, post a picture somewhere where you will see it daily.

Should I Close My Credit Card?

Managing your credit card and finances with your credit can sometimes be a little tricky. At Credit Law Center, we often see clients close old credit cards because they have a higher interest rate, where this can make financial sense it isn’t always the best thing for your credit scores. When determining whether or not you should close an older credit card is what you need to consider:

Read more