Losing your job is a stressful and frightening experience that many of us will go through at least once in our career.
Financially, the severity of the change will depend on factors such as how much you earned, whether you’re the only wage-earner in the household, what debts and financial commitments you have and whether you were made redundant or dismissed for disciplinary reasons.
There’s a wealth of assistance, including information on your rights, over at gov.ukLink opens in a new window – the official Government website that’s always kept up to date. It’s also worth checking out your local Citizens Advice, which will be able to help you out with good, impartial guidance.
One of the principles of credit cards is you can spread the cost of repayment over several months, with a repayment date each month. It’s no coincidence that this is the frequency at which most employees get paid – so losing that income can naturally be a distressing time if you suddenly find you’re unable to make your planned repayments, or even meet your minimum payment.
As soon as you discover you’ve been made redundant, it’s important you confront the situation and contact the organisations you owe money to, including credit card companies.
Most people who go straight to the lenders and let them know their position are glad they did it. Depending on your circumstances and history, companies can freeze repayments, interest or fees for a few months while you get yourself back on your feet. In the short term, it’s in their interest to get their money back, and in the longer term a satisfied customer is worth much more to them.
Many people choose to leave it a few weeks or months to see if the situation sorts itself out (i.e. they wait to get another job). While this might be okay if you have savings or few financial commitments, it’s usually best to let your lenders know sooner rather than later. Things might not turn out quite as you’d like and those few months of easier debt management might be critical.
We’ve also written about clearing debt in our piece on which debt to clear first, which gives a few tips on prioritising repayments. However, we stress again that keeping those you owe money to informed might mean you can shuffle the priorities a little as you find out which debts need to be paid back first.
If you’ve arrived on this page after losing your job, we hope find a new one soon. It’s amazing how often a forced change leads to things turning out better than before, so stay positive.