Posted on October - 06 - 2010
Credit Card Debit what to do when you lose your job can you still apply for a loan modification?
Despite experts now saying the recession officially ended in June, the job market is still bleak. Many Americans have lost their jobs, had their wages or hours cut or go to work every day praying they don’t come home with a pink slip. While many of us feel powerless about our employment situations, one area where we can — and should — take charge is in our credit card habits before and during a period of unemployment.
Many of us still have the mindset that credit cards are a good fallback if we find ourselves out of work and short on cash to pay for basic living expenses. This is a bad idea for two reasons:
- Jobs are harder to find right now. Even if you’ve been laid off in the past and were able to land on your feet in another position in a matter of weeks, there’s no guarantee that will happen this time. Also, the job you do find might not be close to the old one in terms of salary.
- Many of us have already been over-relying on credit cards since the equity in our homes dried up; and you might already be overextended, which means even a small increase in your use could trigger a drop in your credit limit or an increase in your interest rate (thanks to the CARD Act, any increase wouldn’t apply to your existing balance, at least).
Even if you have lost your job and are collecting unemployment you can still apply for a loan modification. With the new revised guidelines to the Home Affordable Modification Program called UP, you can apply as long as you are collecting unemployment for at least 9 months. For more information visit the government’s website: www.makinghomeaffordable.gov
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- The CARD Act: How it Will and Won’t Protect You After February 22
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- Citibank charging annual fees if you fail to charge
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