Is it good to use a credit card in times of crisis?

by Lisa Baker

During these tough days for everyone, it can be very easy to be tempted to use your credit card to obtain essential products, pay for services, online courses, entertainment, or even go crazy with online purchases. But is it a good option to use your card for everything? 

We understand that in fear of a financial crisis you do not want to spend the cash you have, or that due to the quarantine you need to purchase products to keep you entertained , however these practices could put your economy at risk when all this ends. 

Remember that credit cards are not an extension of your salary , so buying more than you can afford, and extending their use, could cause an over-indebtedness that you will not be able to control so easily, even when everything returns to normal. 

It is just during this COVID-19 epidemic, when financial decisions become extremely important, you may have already realized that you are spending less on certain aspects (such as outings, food away from home, parties, transportation, etc.), well This will allow you to take the first step to start saving and change behaviors that could put your economy at risk. 

How to manage your credit card correctly?

  • Set rules

So you can make smart use of your card, use it for essential purchases such as pantries or medicines that you cannot pay with cash and avoid unnecessary expenses at all costs, before falling into the temptation ask yourself, do you really need it?

  • Know your reward programs

Most cards have reward programs that give you points for each purchase you make, see what program you have, how many points you have accumulated and how you can use them. Some will allow you to pay debts or purchase products. 

  • Stay current on your debts

If you already have debts, pay on time, try to cover as much as you can or pay them completely, if you pay only the minimum you could generate more interest that later will be difficult to cover.

  • Avoid cash withdrawals

It can be convenient to have money from your credit card, however, consider that this practice could be very expensive, banks usually take this as a loan, so they charge you interest of 4 to 10%. In the end you will end up paying much more than what you asked for.

  • Turn off your card

Some banks offer the option to momentarily “turn off” your card, find out if you have this service and turn it off for a few days, so you will avoid using it for everything. If you don’t have this option, you can uninstall the apps in which you usually use it the most to avoid making purchases.

Can an extension help me in these times? 

Surely you have heard about the extensions that various banking entities are offering in support of the COVID-19 health emergency. These measures “freeze” the capital you owe on credit cards, home loans, auto loans, personal loans and SME loans, allowing you to postpone the payment of the debt for up to 4 or 6 months (depending on each bank). 

Although it sounds like a good option that will make this time of crisis easier for you, you should check the terms and conditions of each bank very well, because in general they do not freeze ordinary interest, and they will continue to increase along with your debt.


  • Review the requirements to access the extension, some will ask you to be aware of your debts or have a minimum amount.
  • Consult the participating products, not all entities freeze all credits, verify that your bank has the option for your credit.
  • Read the terms and conditions very well, so you will know how much interest you will continue to be charged if you freeze your debt, and you will be able to make a budget for when you have to pay again. 
  • Check the effective dates, each bank establishes a period to sign up for the support program and a specific period to extend the payment of your debt, so there will be no surprises about when you must pay.
  • Analyze the advantages and disadvantages well, before making a decision, analyze well the advantages that it can bring for you, because although you will have more time to pay it is important that you consider the increase in interest and if you can cover it. 

If you were convinced and have decided to accept the extension, it is important that you sign up with your bank before you stop paying, and make a budget to start covering your payments once the extension time ends. If you prefer to keep your finances healthy, it is best to cover your debts as you normally would, so they will not grow.

Remember that during this crisis it is essential to make decisions that ensure our economic well-being, taking care of credit card management is essential these days so as not to put our income, savings or financial goals at risk. 

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