August 1, 2021


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9 Smart Tips to Manage Credit Card Bills With No Income

Millions of individuals around the world have been laid-off or lost their source of income, due to the economic blow of the Covid-19 pandemic. The pandemic resulted in abrupt ending of paychecks for many workers who were dependent on it to pay bills. Those who had significant credit cards debts were hard hit as their ability to repay the debt suddenly vanished.

If you’ve been suddenly unemployed and have a mounting credit card debt, you must immediately assess the situation and formulate a repayment plan. Failure to make timely payments can lead to payment defaults, which damage your credit score significantly. The good news, however, is that if you begin in the right direction, the chances of potential financial damage could be limited.

If you have lost your income and also don’t have much money left in your savings accounts to make the required payments, you need to spring into immediate action. The first step is to cut any discretionary spending and divert the available money towards paying your bills.

You should also explain your difficult situation to the credit card issuer at the earliest. If your hardship is due to the Covid-19 pandemic, then most card companies are likely to cooperate in stretching out payment due dates without letting it impact your credit score. They may also agree to reduce the fees or accept delayed payments. Here are some of the other smart ways of handling credit card bills if you do not have any income at present.

  1. Assess Your Current Financial Situation

If you are having a hard time paying your credit card dues, it is best to begin tracking your expenditure to assess how much money will be needed to manage the minimum needs. During hardships, you can make the minimum payment on credit card bills. Chalk out a budget and as far as possible, try to focus on gathering more savings.

  1. Use your Emergency Savings (if any)

It is always ideal to have emergency savings of approximately 3-6 months of expenses. If you are unable to pay your credit card bills, you can explore your emergency savings for covering the immediately due payments and thereby avoid additional interest charges. You will have to curb all non-essential purchases and focus on savings to avoid additional debt burden.

  1. Consider a Consolidation Loan with Low-Interest Rate

You may be sceptical about sourcing a fresh loan when your income has stopped. However, if your credit score is above average, you can easily get a debt consolidation loan at a significantly lower interest rate. This can be used to get instant financial relief by paying up the credit card dues which attract high-interest rates. A balance transfer credit card can also offer you the same benefit but it’ll be for the short term.

If you’ve lost your job recently, you may also be finding it tough to pay your monthly loan EMIs. While loans are fixed commitments which can be a cash drain each month, it is still possible to manage them better during a crisis. A consolidation loan is a good choice when you want to do better loan management.

  1. Explore 0% Interest Credit Cards

For managing your basic expenditure needs, you can explore a credit card which has 0% APR (Annual Percentage Rate). These do not have any interest for close to a year and also come with reasonably longer interest-free periods. However, remember to avoid overspending once you have this credit card as you may enter into a debt trap instead of getting out of it.

  1. Budget Using Available Funds

Chalk out a budget which will help in separating essential needs from non-essential purchases. Keep a note of the amount of money needed to fulfil necessities. Your budget should include a plan on how to spend the available money such that you can come out of the debt trap faster.

  1. Replace Cards with Cash

Credit cards often don’t let you realise how much you end up spending. It can ease your immediate spending urges and trigger impulse purchases. However, as soon as the payment date comes closer, the real financial burden will hit you. You could especially land in trouble if you have not kept a track of your expenses and have been rendered jobless recently.

Before you realise, your penalties and interest expenses could balloon into a financial burden which becomes unmanageable over time. This often results in a downwards trend of credit score. Hence, if you are using credit cards, make sure to watch the spending. Try to switch to cash transactions to trim unnecessary spending. With cash, you can be far more watchful of utilising your savings towards unnecessary expenses as compared to credit cards.

  1. Switch to Essential Spending

This may seem like a very basic and simple idea but most people are unable to give up on a spending habit which can result in the additional debt burden. It is understandable to avoid cutting down on non-discretionary spending like daily essentials, etc. However, you must focus on minimising discretionary spending on luxury items and avoid sacrificing your savings.

  1. Contingency Fund Using Settlement Money

Usually, at the time of exiting a company, there is a one-time settlement amount offered to employees. It could be a large sum or a small amount, depending on the organisation and your position in the company. No matter the settlement amount, if you are looking to effectively handle your credit card bills, you must put aside the amount as a buffer that can be used for covering essential expenditure when you have no other income. You can even explore options for investing it in liquid funds to generate returns in the long run.

  1. Organise Fixed Obligations

Everyone has monthly, quarterly or annual fixed obligations which are unavoidable in most cases. Whether it is insurance premium payments, investment payments, or annual education fee payments, these need to be covered even when you do not have a source of ongoing income. You can evaluate some of these and shortlist those which can be kept on hold for some time. It makes sense to stop some of the investments till the time you have a job and a regular income source.


Handling credit card bills during financially tough situations like loss of income can be a challenge. However, not all is lost if you can manage your finances well and make use of some smart tips around fund management. It is all about prioritisation, prudent spending, and saving as much as possible.