Should I use my stimulus check towards my credit card bill?

If you’re one of the many people that lost their job due to COVID19, your first plan of action should be to file for unemployment. To learn more about your state unemployment requirements and links to apply, click here.

However, if you’re still employed and don’t have problems handling your bills, you can start paying off your credit card debt! Here are some pros and cons of paying off your credit cards with your stimulus check.

Pros:

• It may raise your credit score! Accumulating too much debt can lower your credit score, therefore targeting your credit card debt can potentially raise your credit standing.
• It can save you more money from interest! Having a continuous balance on your credit cards can result in paying more than what you’ve spent, depending on your credit card interest rate.

Cons:

• Paying off credit card debt can mean temporarily halting savings efforts. If you’ve yet to accumulate a rainy day fund that covers 3-6 months of living expenses, you might want to work on having a vital financial cushion for emergencies.
• Your credit card may not be accumulating much interest. There’s plenty of credit card companies assisting customers who are troubled with finances by lowering rates, waiving late fees, and extending payment deadlines. 

Find out more here.