Personal Finance

5 Smart Ways to Use a Credit Card When You’re Unemployed

Smart Ways to Use a Credit Card When You're Unemployed

During times when people are unemployed or underemployed, they often rely on credit cards to cover their basic expenses. Unfortunately, the high-interest rates and accruing balances can compound financial difficulties. While many people avoid credit cards at these times, there are ways you can use them to your advantage. Here are 3 smart ways to use a credit card when you’re unemployed.

The Financial Struggles of the Unemployed

If you have never been unemployed, consider yourself among the fortunate few. However, the rest of us already have or will face unemployment at some point in our careers. There are several reasons why this happens, many of which are beyond your control.

Whatever the circumstances leading up to unemployment, it’s important to carefully manage your expenses during this time. Even if you have an emergency fund or savings, you can quickly blow through money. And with the current inflation rate and increases in the cost of living, it is even more difficult to stretch your financial resources.

It’s easy to become overwhelmed as expenses pile up and you worry about paying your bills, accruing debt, and keeping food on the table. And the longer it takes to find steady income, the worse it becomes. In addition to the job search, I found myself constantly scrapping to find temporary work or bring in income through side gigs. Not having a safety net or health insurance added another layer of pressure to an already difficult situation.

5 Smart Ways to Use a Credit Card When You’re Unemployed

When there are no other options, many people turn to credit cards to help them through hard times. However, this can be both a blessing and a curse depending on how responsible you are with your finances. While you should do everything possible from accumulating more debt, here are 5 smart ways to use a credit card when you’re unemployed.

1. Take advantage of introductory offers with 0% APR.

Many credit cards entice new customers with introductory offers for 0% APR. Although some only offer it for a few months, others extend the rate for 18 months or more. Taking advantage of these offers can provide a grace period that allows you to pay your bills without the added interest fees.

But, it won’t last forever. When the offer ends, the high interest rates will kick in. It could be more damaging if you can’t pay off the balance before the offer period ends. Therefore, you should only use it as a backup emergency fund and be cautious with your spending so you don’t end up with a mountain of credit card debt.

2. Look for balance transfer offers to save you money.

In addition to the introductory offer, some credit cards also include the added benefit of no balance transfer fees. This feature allows you to save on interest fees if you transfer your credit card debt to the new account.

If you’re smart and stay ahead of the expiration dates, you can transfer the balance again before the offer expires. However, this can be a risky game if you don’t get approval or can’t transfer the entire balance. When this happens, it will leave you paying off the rest at the fixed rate.

3. Choose one with a lower interest rate.

Unfortunately, you may have no other option but to use a credit card to pay your bills. However, the one you choose can make a big difference in your finances.

Take time to review the terms of your current credit cards. Compare the interest rates, credit limits, and fees. You can save a significant amount when you utilize ones that have lower fees. Reading the fine print and choosing the best credit for you can reduce how much debt you accrue when you don’t have a steady income.

4. Set spending limits or use prepaid credit cards.

Those who have trouble controlling their spending may need to take more drastic measures to protect themselves. If you find it impossible to resist the temptation to swipe your card for every expense, then you should consider putting a spending limit on your account.

Another alternative is to use a prepaid credit card. If you are living on a strict budget, you can load money onto the card at the beginning of the month and use it to pay for your expenses. However, once you reach a zero balance, you won’t be able to use the card until you reload it.

Both options will prevent you from accruing more debt and help you stick to your budget.

5. Redeem your rewards.

Many credit cards offer rewards programs that will earn you cashback or points on every dollar you spend. While this isn’t an excuse to rack up more charges, you may already have some rewards available to redeem.

Each card operates within a different structure. Each one has its own terms for how to use and redeem your rewards. If you go with the cashback option, they may send you a check or offer a statement credit. Others allow you to redeem your points for gift cards and other travel perks. So if you have been saving your rewards for a rainy day, this would be a great time to use those rewards to reduce your expenses.

The Hard Truth About Debt

While everyone hopes to stay debt-free, it isn’t always an option. At times, debt is inevitable, especially when you are between jobs. However, credit cards should be a last resort to help cover the essentials until you start earning a steady income again.

It’s best to consider all your options before turning to credit cards for all your expenses. And if you are using them, you need to make sure you are at least making the minimum payments. Otherwise, it could affect your credit score, put your account into default, or force you to deal with collection agencies.

If you must use a credit card when you’re unemployed, contact your lenders to inform them of the change in your job status. They will be more willing to work with you if they have advance notice of late payments. It’s also possible that they may lower or defer payments as well as waive penalties. Many credit card companies also have payment programs during periods of hardship. Although people hesitate to make the call,  it may surprise you to learn how understanding and helpful they are when dealing with financial difficulties.

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BENEFITS OF HAVING A FINANCIAL ADVISOR

Having a financial advisor is one of the most important decisions you can make when it comes to managing your finances so that you don’t finish all your funds playing best payout online casino games thinking you safe. A financial advisor can help you make sound decisions about your money, and provide guidance and advice on how to best manage your finances. Here are some of the benefits of having a financial advisor: Continue reading

Here’s How to Counteroffer and Win When Negotiating Your Salary

 

Receiving a job offer is exciting, but it also leads to one of the more daunting parts of the hiring process: salary negotiations. If the initial number presented by the company doesn’t meet your needs, having a strategy for managing the counteroffer is essential. If you’re not sure where to begin, here’s a look at how to counter offer a salary and win.

How to Counteroffer a Salary and Win

1. Ask for Time

Before you respond to a salary offer, request a reasonable amount of time to consider it. Start by thanking the hiring manager for their consideration thus far, allowing you to start on a positive and gracious note. Then, ask if there is a deadline for a decision. In some cases, the hiring manager will let you know how long the company can wait. If they don’t have a set timeline, request two business days to respond.

Generally, two business days are enough to prepare a counteroffer. Plus, the request isn’t so long as to make it seem like you’re trying to string the company along.

If the hiring manager expects a decision in less time, that doesn’t mean you can’t make a strong counteroffer. However, anything less than 24 hours could indicate the business is trying to rush you, potentially making it harder to handle any research before beginning negotiations. While that’s not inherently a red flag, do make a note of whether the hiring manager is putting a lot of pressure on you and keep it in mind during future conversations.

2. Know Your Value

Figuring out a fair salary to present as a counteroffer generally requires some research. You’ll want to spend time learning about the average compensation for similar positions in your area. Additionally, you’ll need to factor in the value of the skills and experience you bring to the table.

Typically, you’ll want to use several resources to determine what pay rate is appropriate, as each one may be accessing data from different sources. Additionally, make sure your research is location specific, as compensation can vary from state to state or even city to city.

The goal here is to identify a figure that feels competitive to you but also leaves space for the company to counter your offer. Often, the easiest way is to identify a salary range that seems appropriate. Then, you can present a number that’s on the higher end, giving the company room to negotiate down while still remaining in your target range.

3. Examine the Offer

After finishing your research, take a close look at the initial job offer provided by the hiring manager. Along with the salary information, make sure to review the benefits, perks, and bonuses listed. In some cases, a lower pay rate is offset by benefits, perks, or bonus structures that exceed what’s found with competitors. As a result, you need to factor in the value of them when determining whether your potential salary counteroffer is fair.

Additionally, benefits and perks are points you can potentially negotiate, too. Knowing that option is available is helpful if a company doesn’t have much room to negotiate regarding pay rates but can make adjustments to other parts of the offer. For example, you may be able to request more paid time off in lieu of an increased salary.

Knowing that’s an option allows you to see where your counteroffer can potentially go if you encounter resistance during the discussion. That way, you don’t feel stuck either accepting the offer as-is or walking away. Instead, you can pivot, focusing on other points that provide you with value.

4. Prepare Several Paths

Once your research is complete and you’ve reviewed the benefits package, it’s time to prepare for several different paths. First, you’ll design your initial salary counteroffer, as that’s likely what you’ll present first. After that, consider other points you’d potentially negotiate and what you’d request, giving you additional pathways to a fair offer if a higher pay rate isn’t an option.

Essentially, this process is about being prepared for any response the hiring manager may give. That helps keep the conversation rolling while leaving you confident and collected along the way.

5. Present Facts

When you present your counteroffer, remain focused on the facts. After highlighting your ongoing interest in the role, tell the hiring manager the salary you think is fair and provide some details regarding why you came to that conclusion. For example, you can cite your salary research as the basis for your counteroffer.

The goal here is to ensure you’re backing up your requests with solid data. That not only helps you remove emotion from the equation, but it also makes your case more compelling overall. As a result, you may have a higher chance of getting a pay rate that leaves you satisfied.

6. Listen

After you present your initial counteroffer, it’s time to listen. How the hiring manager responds can help you determine where you may need to focus your energies next. Plus, using active listening skills ensures that you don’t miss a critical point.

Again, it’s critical to set emotions aside while the hiring manager speaks. By concentrating on the details they’re sharing, you’ll have a better chance of continuing the conversation in a positive manner.

7. Compromise

After the hiring manager shares their perspective, it’s time to find a compromise that leaves everyone feeling satisfied. For example, you can attempt to balance off a lower salary with improvements in the benefits package, as mentioned above. Just make sure that you remain fact-focused throughout, using data or highlighting your value to show why you’re making various requests.

Additionally, you want to listen carefully to any input from the hiring manager. Not only will that help you determine with points of the offer are negotiable and which aren’t, but it can also give you a lot of insights into the hiring manager’s mindset, the company’s culture, and more. At times, that information is incredibly revealing and may even show that a job you thought was a great fit isn’t necessarily the match it seemed to be on the surface.

8. Make a Decision

Once the negotiations show that there’s no more room for adjustment, it’s time to make a decision. Ideally, you’ll have found some middle ground between the initial offer and your first counter offer. If that’s the case, request the new offer in writing, and review it to ensure it matches what was covered in the discussion before signing.

If you and the hiring manager aren’t able to find a happy medium, then it’s time to determine if the job is genuinely right for you. In some cases, the negotiation process can reveal culture issues or other challenges that could make the position a poor fit. At times, it may simply demonstrate that the company either can’t afford reasonable compensation or isn’t willing to try. If that happens, then walking away may actually be a win, as it lets you focus your efforts on other opportunities that can pay you what you’re worth.

Do you have any other tips that can help someone figure out how to counter offer a salary successfully? Have you tried any of the recommended strategies above and want to tell others about your experience? Share your thoughts in the comments below.

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