Around 67 million Americans worry they’ll fall behind on monthly credit card payments due to the far-reaching impact of the coronavirus, according to a new coronavirus money survey released by personal finance site WalletHub.
As much of the nation locks down to “flatten the curve” in order to avoid a massive number of COVID-19 cases spiking in a short period, restaurants in many states are closed. National and local conferences shut down. Airlines are flying toward bankruptcy. People are afraid to even look at their retirement accounts due to the recent stock market plunge.
The U.S. Government wants to send stimulus checks of at least $1,000 to most Americans to help them pay for monthly expenses during the coronavirus crisis.
That extra money can help pay for basics like rent, mortgage payments and food, but what if credit card debt already stretches your paycheck thin?
Money problems and the coronavirus are top stressors
Around 28% of Americans told WalletHub the top stressor on their minds right now is the coronavirus. The second top stressor (26%) is money problems, according to the WalletHub survey.
Those top current sources of stress aren’t surprising, since many Americans have no health insurance or emergency savings and already live paycheck to paycheck.
Millions worry they won’t be able to pay credit card bills
According to the WalletHub survey, 67 million Americans anticipate they’ll have trouble making monthly credit card payments and paying off credit card debt because of the coronavirus.
Falling behind on payments is a valid concern, since the average U.S. household owes more than $7,000 in credit card debt, according to personal finance site Nerdwallet. Total revolving credit card debt in 2019, according to the same source: $466 billion.
Americans want late payment forgiveness
Around 76% of those surveyed by WalletHub said they think that credit card companies should forgive late payments. Those debtors aren’t just acting like deadbeats, either.
“Credit card companies should give relief to affected customers, just like they’ve done during major natural disasters in recent years,” says WalletHub CEO Odysseas Papadimitriou. “Roughly 67 million Americans anticipate having trouble paying their credit card bills because of the coronavirus. Their struggles could easily ripple through the economy if left unaddressed.”
Americans ramping up savings in response to COVID-19
Around 158 million Americans (63%) are now paying more attention to their savings accounts and saving more than they spend during the coronavirus crisis, according to the WalletHub survey.
That new personal finance practice for many is a good strategy, since around 69% of Americans have less than $1,000 in savings, according to a 2019 GOBanking Rates savings survey.
Credit card trip cancellation insurance may help
Approximately 20% of credit cards offer trip cancellation insurance, providing an average of $4,400 in coverage, according to WalletHub. With cards that provide trip cancellation insurance, cancellation is typically covered if you’re sick or quarantined by a physician. So if you canceled your trip to self-quarantine, you won’t qualify for coverage.
Did you have to cancel airline tickets, hotels, conferences or other travel arrangements due to the coronavirus? Check your credit card benefits or call the card issuer to find out if your card has automatic trip cancellation insurance.