Tips What To Do During A Credit Crisis
Sunday, February 1, 2009, 6:00 AM | Leave Comment
By now, everyone knows we are in recession. Many economists agree that the recession will get worse before we see light at the end of the tunnel. Many people get into a panic mode.
They keep wondering whether to continue keep money in the bank which most people do anyway. But they tend to lose sleep over it.
They are always worried about whether to sell their stocks and mutual funds and some do no matter how much financial gurus advise us to not panic and stay put.
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Do keep your money in the bank
Many Americans are worried if their money in the bank is safe. Statistics tell us that most Americans have less than $250,000 in the bank. Congress has temporarily increased FDIC deposit insurance from $100,000 to $250,000 per depositor through December 31, 2009.
The basic insurance amount is $250,000 per depositor, per insured bank. The $250,000 amount applies to all depositors of an insured bank.
You simply don’t need to fret should your bank get into trouble. Do keep your money in the bank. However, make sure it is a member of FDIC.
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Do send for your credit report
Your credit score is an important information that affects decisions on everything you do. For example, a higher credit score is an essential factor for securing any kind of loan – car, mortgage, credit card etc. Higher score means lower interest rate for your loan.
First off, get your free credit report and then take steps to improve your credit score.
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Do talk to your creditors
Get on the phone now and call your creditors – your bank, your credit card company. For their business, they don’t want you to default on your loan. When you talk to your lender, see if you can get them lower the interest rate on your card. Both your mortgage lender and credit card companies are going to be more willing to work with you.
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Do sit on your butt
Instead of fretting, trading, and losing sleep, just stay put and not sell stocks or mutual funds. Remember, it is absolutely impossible to time the market. Past performance of the market reminds us again and again that bull markets always follow bear markets.
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Do pay your bills on time
First off, always pay for your bare necessities – your mortgage or rent and utilities – and on time. You need to prioritize other bills like credit card bills. Always pay at least the minimum and more if possible. If you have more than one credit card bill, then pay first the one with the higher interest rate.
In a Nutshell
Do think about the fact that your financial situation can change really quickly. It has changed for the worse the last couple of years for many people.
