Due to the uncertainty brought on by COVID-19, many Americans are using far less credit than they were previously. According to MarketWatch, credit card debt fell $28.2 billion (30.9% annual rate) in March – the largest decline since January 1989. Even though Americans continue to shoulder the weight of this financial crisis, they are hesitant to take on more debt. 11% of employees have stopped paying down debt in an effort to support their immediate financial needs.
Our data shows Americans shifting their focus. Since March 15, we’ve seen a 14% increase in employees’ who have prioritized the goal of setting up an emergency fund. 74% of employees are concerned about at least one aspect of their well-being as a result of COVID-19.
But it isn’t just individuals that are making changes to support themselves during this financial crisis. Credit card companies are reacting to the decrease in credit usage by lowering credit limits, often without warning. Roughly 25% of card owners in the US had their limits reduced or accounts closed within the past 30 days. If you aren’t checking your credit accounts on a regular basis, a decrease in your credit limit could have a negative impact on your credit score. Why? You could (unknowingly) be using a greater percentage of your available credit by virtue of your credit limit decrease.
As a best practice, you should aim to keep your credit utilization rate below 30%. If your credit card company cuts your credit limit and your balance stays the same, your credit utilization rate will increase. Check your credit accounts. If you notice a credit limit decrease, call and ask your credit card issuer to raise it. If they are unable to grant your request, you may need to consider scaling back your spending or paying down existing debt.
There are valuable resources available to help you keep tabs on your finances. Equifax, Experian, and TransUnion are now offering free weekly credit reports through April 2021. Take advantage of this free resource to ensure you’re aware of any changes to your credit score, including potential credit limit decreases. Credit card issuers routinely monitor your credit usage and make adjustments if your creditworthiness changes, regardless of whether or not a crisis like COVID-19 has impacted your financial situation. Be proactive in monitoring your financial situation, and take steps when you can to improve your creditworthiness.
© Copyright . All rights reserved.
Loans are made by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC. Loans subject to credit approval. Loan products, features, and service providers vary by state. Service providers are FinFit Ops, LLC (see licenses) or its affiliate, Salary Finance, Inc. (see licenses). See application terms and loan agreements for more details.
Funding time dependent upon funding method selected. Expedited funding may incur additional fees.
FinFit is a financial technology company and is not a bank. Banking services provided by Choice Financial Group; Member FDIC.
Student loan services are provided by unaffiliated third parties. FinFit loans issued by Celtic Bank do not include student loans.
Wage Now is fully funded and managed by an affiliate of FinFit. If any fees apply, those fees will be disclosed prior to entering into any agreements.
Residents of California, New York, North Dakota, South Dakota, Tennessee and Vermont are not eligible for WageNow. This does not constitute an offer or solicitation for WageNow to residents of those states.
FinFit’s Financial Wellness Program, which includes educational content, a financial assessment and a financial dashboard, are free to registered members.
Services offered may incur fees and/or interest. All fees will be disclosed prior to entering into any agreements.
Products listed are a representation of FinFit offerings. Actual availability may vary. The products available to you and your organization will appear on your FinFit membership dashboard. Actual loan amounts and rates offered vary based on lender, credit worthiness and other factors.
Privacy Notice (Sp) | FinFit Privacy Policy (Sp) | Licenses | *US Patriot Act | Website Terms & Conditions | Member Rewards Terms & Conditions
SC Consumer Rights & Responsibilities | NM Small Loan Consumer Brochure | NM Loan Rate & Fee Disclosure | Additional Information for NM Residents