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Credit card issuers are helping consumers affected by coronavirus—what you need to know

Worried about financial hardship during coronavirus? CNBC Select explains what major card issuers are doing to help consumers during coronavirus and asks advice from Leslie H. Tayne, a debt-relief attorney and founder of Tayne Law Group.

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The Chase Slate® Credit Card and BankAmericard® credit card are not currently in market. Please visit our list of the best balance transfer cards and best Chase cards for alternative options.

On Monday, the FDIC encouraged financial institutions to prepare for more American consumers experiencing financial hardship due to the coronavirus pandemic.

In response, a number of top credit card issuers, including Chase, Wells Fargo, Capital One, Citi and U.S. Bank, have posted statements and information on their websites to address customer concerns and promote readiness amid the widespread disruptions caused by the COVID-19 outbreak.

Card issuers have also announced emergency support, including credit line increases and heightened fraud security. And while remote work has begun to place a strain on companies nationwide, many top financial institutions state they are doing everything possible to staff call centers and prepare for an influx of customer service questions amidst this public health emergency.

Below, CNBC Select outlines what support you can expect from your card issuer during these turbulent times. We also spoke with Leslie H. Tayne, a debt-relief attorney and founder of Tayne Law Group, about what to consider before taking action.

Mobile banking is more important now

Now is a good time to familiarize yourself with your credit card's mobile app. And card issuers are encouraging customers to take advantage of digital resources:

"We encourage you to access your accounts from home 24/7 using Citi Online or the Citi Mobile App to check balances, make payments, transfer funds, deposit checks, or find the nearest ATM. We've made a number of enhancements that make it easier than ever to manage your account digitally."

Services like the Capital One Mobile app allow you to make credit card payments and monitor your account for fraud. With the Chase Mobile® app you can send or receive money between friends and family via Chase QuickPay® with Zelle®. 

And if you are using a no-fee balance transfer card like the Chase Slate® credit card to help pay off debt while you prepare for the uncertainty ahead, you can initiate the fund transfer on the app without leaving the comfort of your home.

Promotional financing can be helpful (as long as you have a plan)

The uncertainty of the coronavirus outbreak has many stressed-out shoppers racing to the supermarkets. And many consumers are concerned with how they will afford to finance everyday expenses as an increasing number of Americans find themselves out of work during the outbreak.

If this describes you, a 0% APR credit card may seem like a simple fix, but "spending during a sensitive time can distort the way you see debt and care about the amount that you're charging on your cards," says Tayne. 

When you're spending during a state of emergency (whether personal or national), you should aim to apply the same rules you follow during more normal times. So if you want to use a card with promotional financing, you need a plan to pay it off eventually. 

Start by setting a maximum budget for how much you'll need to spend, then divide your total budget by the amount of months you expect to have no interest.

For example, if you spend $1,000 in purchases and your 0% interest period lasts for 12 months, you should prepare to pay $83.33 per month in order to pay it off before interest hits.

A card with a long 0% APR period can help make your monthly payments as reasonably low as possible. The BankAmericard® credit card offers no interest for 21 billing cycles on new purchases (after 15.49% to 25.49% variable APR).

Citi is offering credit line increases and collection forbearance 

Through Citi's "always on" assistance programs, the card issuer is allowing eligible cardholders to increase their credit line and/or begin a collection forbearance plan if they can't pay back their debts. But Tayne warns consumers to be careful taking advantage of these programs: "Increased credit lines, in particular, can be dangerous."

Latest: Credit card issuers offer customer assistance amid coronavirus financial hardship

Should I increase my credit line?

"While it can seem like a relief if you're strapped for cash, the more you charge on your credit card, the more difficult it will be to get out of debt," says Tayne.

Plus, "the temptation to overspend may also be greater when you know you have access to more funding."

"Additionally, it's important to keep in mind the impact on your credit score," Tayne says. "A greater credit line can actually be beneficial to your credit score if you're not using all of it. However, maxing out your cards will cause your score to drop because credit utilization is a major factor in determining your score."

A better alternative is to use a balance transfer credit card to pay off your existing debt without interest for a period of time, and then put the savings into an emergency fund if possible.

What is forbearance?

While forbearance is not the same as forgiveness, it allows for a temporary reprieve in the event you cannot make your minimum payments. Every forbearance program is unique to both the lender and the cardholder, but most usually allow for a short period of no payments (around six months) and occasionally other assistance like lower interest. 

Tayne tells CNBC Select that forbearance can be particularly helpful during a difficult period that you expect will only be temporary.

"However, consumers should understand that interest will continue to accrue during forbearance, so you will end up paying more over time. This option should only be exercised if you know you truly won't be able to make your full payments."

Tayne also advises that in order to make the best use of forbearance, you should contact your credit card company, explain your situation and ask what options are available to you.

You can ask your card issuer about temporary relief

While you'll likely hear a lot about low-APR small business loans and personal loans in the coming weeks, most banks also encourage credit cardholders to call the customer service number on the back of their credit cards to inquire about financial help during coronavirus.

U.S. Bank is offering "product discounts and other customized solutions," including lowered interest rates on select loan products, effective Friday, March 13.

And on March 17, a representative from Discover told CNBC Select:

Discover will be extending relief to qualified customers who are experiencing financial difficulty caused by the spread of COVID-19. Discover customers may receive assistance that can include support related to payment timing, fees and late payments.

But, Tayne advises that consumers must exercise these options carefully.

You should only take advantage of these special offers if you need to address an acute need. You shouldn't inquire unless your livelihood is significantly affected or don't have an emergency fund or other savings accounts to rely on.

If you take on additional debt during the coronavirus outbreak you should be sure, as always, to inform yourself about the terms, interest rates and long-term impacts of your decision. 

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Information about the BankAmericard® credit card and Chase Slate® has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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