LAS VEGAS (KTNV) — The experts at NerdWallet.com have been putting together advice on different financial areas to help consumers navigate their finances during the COVID-19 pandemic.
They've created this Q&A guide with answers to many common financial questions.
Financial Q&A for Consumers:
Coronavirus has caused the need to cancel or hold off on booking travel. What should people keep in mind when canceling trips and planning for travel in the coming months?
Consumers who booked travel:
1. Call the airline no more than 72 hours before your flight to cancel or reschedule.
Each airline is setting its own policies, and these policies are changing every day. If you need to rebook, try to make changes to your reservation online first. Airlines are asking travelers to wait until 72 hours before their flight to call because of high call volume. If your flight is canceled by the airline, they will re-book you or refund the value of your unused ticket. For additional information on airline policies, here’s a list NerdWallet.com put together on what some of the biggest carriers are doing.
2. If you have travel insurance and/or used a credit card with travel protections, that only covers what has happened not what you think may happen.
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Unfortunately, you can’t expect a refund just because you don’t want to travel. “Cancel for any reason” coverage can give you some more wiggle room, but still has limitations. Always read the fine print when choosing a travel insurance policy to find out what it covers and how much you can be compensated.
Consumers looking to travel in the coming weeks/months:
1. Take a wait-and-see approach.
Things are changing by the minute, so that must-attend family event may get canceled anyway.
2. If you must book travel now, consider travel protection.
Travel credit cards can offer some of the best coverage if you use them to pay for your bookings, but “not wanting to travel because of an epidemic” is not a covered reason. Consumers should also look into travel insurance for international trips. The cost can vary depending on the policy, but consumers can have some recourse if their trip gets canceled or they get sick while traveling.
What protections are available when it comes to consumers’ credit cards during this time?
Some banks are making changes across the board and offering consumers a number of COVID-19 protections from waived interest rates to late payment forgiveness.
If you can’t pay your credit card bill, call your issuer and explain the situation; they may be able to create a repayment plan that works for your situation.
What about consumers who are struggling to make payments on their mortgages or loans? How should people prioritize making these payments?
It’s still important to pay bills and essentials like rent on time, to protect your credit score and avoid hurting your long-term financial stability. Some companies are waiving late payments and interest, but try to focus on paying off any high-interest debt, like credit card debt.
Expenses like monthly subscriptions, take-out, and other wants can be cut back, if necessary.
How can consumers protect their retirement savings?
During big market swings, your investment portfolio could well lose money. This is where ignoring the market becomes important if you’re investing for retirement. Avoid making any rash decisions. You don’t actually lose money when stocks are down unless you sell.
Selling is what locks in losses; stick with your investments and ride it out. This allows you to recover in time.
With low mortgage rates, is now a good time for consumers to refinance?
You want to monitor rates and decide whether it’s worth waiting to refinance. While mortgage rates fell drastically in February and early March, lenders are overwhelmed by refinance applications. There are only so many loans they can process at once, so some lenders have raised rates as a way to hold down the volume of new applications. So if you can't find an interest rate you like, check back in a few days (or even daily).
Their full guide can be found at NerdWallet.com.