5 tips you should know on managing debt during coronavirus

A recent survey shows more than 4 in 10 households are living on the edge financially. Many Americans are now desperate as they remain unemployed.

Polling reveals COVID-19 has dealt the most devastating blow to the most vulnerable. People who already had the smallest financial buffer. And as a result, many are now scrambling to figure out how to manage their debt, including the debt on their credit cards.

"My bank account is completely empty, it's probably, currently as we speak, overdrawn by $38," said James Frazier of North Philadelphia.

Frazier has been out of work since July but still has bills pay to pay.

"Electric, gas, water, cable, phone, I paid the insurance on my car which is due," he said.

And for many consumers, credit card bills keep coming, too.

"Many people have lost their jobs or facing economic difficulties because of the coronavirus pandemic," said Kevin Doyle of Consumer Reports.

Two in three households report severe financial issues and no way to pay back debt, including the debt on their credit cards.

So Tip one: Do not just stop paying. Contact your credit card company.

"What they might do is allow deferred payments or reduce or suspend interest charges," said Doyle.

In a LendingTree survey, 91% of consumers who requested a break on their payments got one. And under the coronavirus relief law, your credit score cannot be negatively affected if you meet the terms of the new payment agreement.

Just make sure you get that agreement in writing and understand how you'll have to pay back those deferred payments.

Tip two: Open a balance transfer card.

"These can be interest-free for sometimes 12 months, sometimes 15 months or longer, which can really easily temporarily relieve financial pressure," Doyle said.

But CR warns you do need to have a decent credit score to get a balance transfer card.

Tip three: Don't pay off your credit cards if you don't have an emergency fund.

"It's more important for you to have a six- or 12-month emergency fund than it is to pay your entire credit card balance off every month," said Doyle.

Tip four: Don't use your credit cards to pay medical expenses, taxes, mortgage payments, or student loans.

"There are much better options available for dealing with those sorts of debt than putting them on a credit card," he said.

For example, federal and state programs forgive hospital debt for families that meet certain criteria.

Tip five: Beware using your credit cards as your emergency fund can be a dangerous proposition.

"They can be taken away for no reason. If the credit card issuer wants to he wants to close the account, it can," he said.