If you are a “pawn” caught up in “Great Trump Shutdown” with no paycheck or reduced earnings, then you should take some steps to preserve your credit cards and credit score during the credit card shutdown.
Having a credit card late payment posted to your credit file at the major credit bureaus: Equifax, Experian and TransUnion, can be very hurtful. Late payments comprise about 35% of your credit score. Unlike credit utilization (amount of credit you are using), which comprises about 30% of your credit score, your payment history generally cannot be revised.
Adding salt to the wound is the “hair-trigger” practice of assessing late fees. According to CardData, the top four U.S. credit cards issuers (about 45% of all major U.S. credit cards): Chase, Capital One, Bank of America and Citibank, charge late fees up to $38. For paycheck-to-paycheck families this nuisance fee can be devastating to, especially for those affected the “Great Trump Shutdown.”
If at all possible, make at least the minimum payment to preserve your credit score and avoid the late fee.
If you cannot make the minimum payment, contact the credit card issuer and request a waiver of the minimum payment for up to three billing cycles. If the credit card issuer agrees, then it is best to assemble a quick letter to the issuer confirming what was agreed upon. Sending it via U.S.P.S. certified mail is best. This letter can later become an exhibit, if necessary, to dispute any late payments reported to the Big 3 credit bureaus.
Other advice for victims of the “Great Trump Shutdown,” is to request a credit line increase immediately. Understandably, this will most likely be based on your current credit score. However, like victims of natural disasters, credit card issuers may raise your credit line based on your payment history with the account, without pulling your credit score.
Raising your credit line can also be a good strategy, since it will likely raise your credit score over time, as it lowers the percentage of the amount of total credit you are using, as it raises your total available credit. Taking on more credit card debt is not a bad thing if used temporally through the “Great Trump Shutdown.”
If you recently received a credit card offer in the mail, then consider applying, if your credit is good.
Finally, some high end credit cards offer no-cost emergency cash advances. If the President declares a “national emergency” to build a wall, then this could qualify as a “personal emergency”.
GOOD NEWS: U.S. government employees will likely receive backpay, a fact not lost on many credit card issuers.
BAD NEWS: Some U.S. government contractor employees may not receive backpay, and find their credit scores and pocketbooks irreparably damaged. SAD !!!