At the best of times we have trouble keeping our credit scores within an acceptable range, but with the current debt crisis it is almost impossible. Although the debt crisis is called by a number of different names such as a recession or an economic downturn, the bottom line is still the same. Most of us are literally robbing Peter to pay Paul. If you have any hope of surviving the current debt crisis in order to come out the other end with a decent credit score, there are some things you might want to be aware of.
If You Have a Job Keep It!
Statistics have shown that there is a real jobs crisis. Just take a look at the fact that President Obama and current legislators have extended unemployment benefits and you will see that people just are not finding work as they were a year or two ago. In fact, Great Britain recently decided to eliminate 500,000 government jobs as part of their austerity measures. This was under the premise that it would enable them to cut back on corporate taxes which would then enable companies to snatch up those unemployed government workers. The tax money saved was meant to help them grow their businesses.
This didn’t happen and according to a report in the NY Times and it isn’t about to happen any time in the near future. Companies are going bust by the hour. You may be looking for upward mobility, but current conditions are not favorable for changing jobs. With so many businesses closing their doors, you just might land an employer who is about to be bankrupt. Without access to their books, you have no way of knowing how solid that business is. If you have a job, keep it!
The Great Credit Card Dilemma
It has also been reported by almost every major consumers’ group that people are now using their credit cards to pay monthly bills such as their utilities and to shop for groceries in order to make ends meet. Inflation is skyrocketing but wages are at a virtual standstill. The best advice here is to try to avoid using your credit cards if at all possible. Keep in mind that you will be paying interest on those expenses which is making already high bills even higher! What you might want to do in a situation like this is make sure that the amount you charge can easily be paid within thirty days so that those charges don’t accrue interest.
Of course, that pre-supposes the fact that you have a credit card that doesn’t charge interest if the balance is paid in full within that billing cycle. If you already have a balance which cannot be paid in full it will not work. What most financial advisors are suggesting is that you get rid of all your higher interest credit cards and only keep one on hand for emergencies only. (The operative word here is emergencies!) Most utilities companies and other debtors will gladly set up payment arrangements if you contact them timely before the due date. Once you have passed your due date it becomes much more difficult to get a payment plan.
In the end it is up to you to cut back wherever and whenever you can. Only use your credit cards as an absolute necessity and keep your job even if you feel you are not making enough money. You may find a better job and you might not, but hang on to the one you have until you are certain you have a better position. Take the time to check out a new employer before making the change. Surviving the debt crisis will take extra planning, cutting back on expenses and a little extra fortitude, but it can be done. With a little effort you can come out the other end of these trying economic times with a decent credit score. Save now – spend later.