Nearly three weeks after Hurricane Beryl pummeled through Texas, many residents are now left in financial limbo as they wait for their FEMA checks to come in.
We sat down with Derrick Kinney, a financial expert with GetTheRaiseYouWant.com, and he shared how you can stay up to date with your bills while you wait for emergency funds.
Q: I covered my storm-related costs with a credit card. Without that FEMA check, I can’t pay the bill. What do I do?
A: Call the credit card company and let them know you were involved in a hurricane. Ask the company what support or help [they can] provide. This can come in the form of waived interest rates or even waived fees. The goal right now is to look at every possible aspect to basically buy yourself time, at least for the next couple of weeks.
Q: Do credit card companies have any hardship allowances?
A: It depends on the credit card. Most are willing to work with you, as long as you’re caught up on your payments already. If you’re behind, that’s a different story, but they may give you a cash advance, or they may give you a reduced interest rate. Other things to keep in mind: You could borrow against your 401k, or possibly a life insurance policy. But keep in mind, while these are not the best options right away, when you’re in a pinch, you want to find every possible option to make sure you cover your bills in the short term.
Q: I have a low credit score; will that affect how much money I get from credit card companies?
A: It could. The key is, it’s typically not based on what you borrow, it’s your inability to pay the money back. So, if you’re already at a low credit score, the likelihood of your credit card company letting you borrow money is pretty low. If you have a good credit score, this could be a good opportunity. Low score or not, it’s important to look at every possible way to make sure you make the rent. The goal is not to get ahead, but to stay current on your bills.
Q: How else can I bridge the money gap until I get my FEMA check?
A: The most important thing right now is to evaluate what your essential expenses are and what are your desired expenses. For example, rather than eating out at restaurants, try making food at home to help cut some costs. Don’t make a financial dilemma on top of a hurricane dilemma.
Q: How do I protect my credit score if I’m late on payments?
A: Call the credit card company immediately. You want to be proactive and let them know, “Look, I have been part of this hurricane situation. It has dramatically impacted my finances. I’m going to be using my credit card more often. I want to give you a heads up on that. And also, is it possible to waive any fees, reduce the interest rate?”
You want to give them a heads up, so that way they know if there were to be a late payment, it doesn’t penalize you because they want to get paid. In most cases these days, many credit cards companies not all of them, are willing to work with you once they hear from you.
Q: Should I keep a log of when I contact my credit card company?
A: Keep records, because if it’s not written down, it’s as though it never, ever happened. Whether it’s on the Notes app on your phone or a journal, you want to make sure you get the person’s name, their phone extension, the time, the date you talked to them. Typically, the credit card company keeps records as well, but this is you owning your own situation. No one’s going to give you a loan for this. You want to make sure that you’re doing everything you can to protect you and your money, and that begins with writing down every single detail.
Q: If I can’t pay all my bills, how do I prioritize?
A: Here’s what you can do: Make a list on a sheet of paper or in the Notes app on your phone of all of the bills you have, the amount, and when they’re due. Add a separate column of what will impact your credit score the most. You could call your landlord possibly and ask for an extra week. If it’s a credit card or annual bill, those things get reported to the credit score companies, and those would be what I would place as a higher priority. All of them are important, but right now you want to make sure that you’re making very deliberate steps to protect you and your money. And that begins with calling each person. If they hear from you personally, they’re more likely to want to work with you.
Q: Where can I get immediate financial assistance?
A: It’s going to vary based on each individual community and where you live. But in most cases, most people will not give you a loan for a hurricane unless you already have a good credit score. Again, everybody wants to get paid back. In the case of an emergency, borrowing money from family, from friends could be a backup solution if they know you are going to pay them back.
At the end of the day, it’s important to stay calm and continue to act like you are the CEO of your money. How would a CEO in a crisis handle their money? And that’s how you want to think, even on the lowest level of what can you do to make the next best financial decision today, so you work yourself out of what could be a really bad situation.