NEW YORK ( — Unfortunately, job loss has become a reality for millions of Americans. Your income may end, but your expenses will not. There is no magic wand to make the bills or the bill collectors disappear, but there are some smart financial steps you can take regarding your credit cards:

  • Contact the credit card company immediately. Let them know that you have lost your job and see if they offer any type of relief. They will probably be more willing to work with you if they are notified before they spot a problem.
  • Maintain your minimum payments. Pay the monthly minimum so you don't damage your credit score and incur penalty fees. You may not want to make bigger payments to pay down debt during this time. Instead, put that cash into an emergency fund.
  • Cut spending and switch to cash. When your income drops or stops, you have to cut spending and expenses. Paying cash will make you feel the pain of each dollar that leaves your wallet, causing you to think twice before spending it.
  • Remember that credit cards are not a replacement for your salary. Eliminating the use of your credit card will prevent you from falling further into debt and destroying your credit score. If you can't afford to pay cash for a purchase, you can't afford the additional interest payments.
  • Avoid cash advances on your credit card. Cash advances may be quick and easy, but they also charge high interest rates and fees. Some cards charge nearly 25% APR for cash advances.
  • Check out hardship programs. Some banks offer these for lost work, severe injury or family deaths. You may have part of your balance forgiven, or you may be able to delay payments for a few months while you find work.