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How To Manage A Credit Card Amid Mental Health Struggles | Economic news

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Personal finances often put a strain on mental health. Debts, bills, job security and other similar topics are major sources of stress and anxiety for many people. Problems can also go in the opposite direction: mental health issues can complicate managing personal finances.

Credit cards present a unique challenge. They offer convenience, rewards, consumer protection, and emergency access to purchasing power, making them valuable tools for consumers. But credit cards also allow you to spend money you don’t have and get into debt quite quickly, especially when you feel overwhelmed.

Mental illness does not have to affect a person’s finances. Many people struggling with mental health issues have turned to tools, strategies, and resources to successfully and painlessly manage their credit cards and other aspects of their personal finances.

Control your expenses

Many mental health issues can manifest as overspending — and credit cards make it easier because they let you spend money, even if you don’t have any in the bank.

“At the heart of many mental health issues, we’re dealing with a giant hole that we’re trying to find a way to fill,” says Sarah Swantner, Certified Financial Planner and Licensed Professional Counselor at Black Hills Integrative Counseling & Training in North Dakota. South. “For some people, spending money doesn’t solve the problem, but it provides temporary relief.”

Buying something new or going on an expensive trip, for example, can distract from psychological pain. In the case of addiction, relief can come from substances or gambling. Addiction, in turn, can facilitate irresponsible or irrational spending while under the influence.

Fortunately, you can implement changes that will help control expenses and save time to address underlying mental health issues.

Lock your card

A credit card lock temporarily disables your credit card for purchases, cash advances and balance transfers. You can usually install a lock by logging into your account and making a few selections; the locks take effect immediately.

However, unlocking the card is an equally seamless process, so if you don’t think a card lock is strong enough to curb overspending, you can combine it with other strategies.

Cut access to cash advances

Credit card cash advances can also lead to overspending. They put money in cash without having to make a withdrawal from the bank. Additionally, their anonymity – the credit card statement will show the advance rather than the name of a particular merchant – hides the details of any expenses.

To restrict your access to cash advances, contact the card issuer. Some allow you to disable the feature entirely or reduce the advance limit. Refraining from setting up a PIN with the card issuer is another preventative measure. A PIN is often required to get a cash advance, so if you don’t have one, it will be more difficult to get money that way.

It may also be a good idea to immediately destroy any convenience checks the issuer sends you: cash advances obtained with convenience checks are subject to fees and high annual percentage rates, or APRs. To make sure those checks never even make it to your mailbox, ask your card issuer to stop sending them. For added security, you can opt out of all credit offers by submitting a request to optoutprescreen.com. You can opt out for five years or permanently, but the latter requires written consent.

Seek help from a mental health professional

Credit card solutions, such as card locks, can be implemented while you work to improve your mental health. Contact the Substance Abuse and Mental Health Services Administration by visiting their website, samhsa.gov/find-help/national-helpline, to be connected to local resources or contact the National Alliance on Mental Illness. Dial 988 to speak to a trained counselor during a mental health, addiction or suicide crisis.

Face your financial fears

Mental illness is associated with money avoidance behavior, says Ashley Agnew, a Massachusetts-based financial counselor and board member of the Financial Therapy Association. Money avoidance is the tendency to resist thinking about money and making financial decisions. This can manifest itself in postponing or neglecting tasks, such as checking monthly credit card statements and monitoring credit reports.

Avoiding money is not necessarily related to income either. Some people may have enough money to pay the bills, but lack the motivation to take care of their personal finances.

Inaction with credit card accounts has serious consequences. Late payments are reported to the credit bureaus once an account is 30 days past due, lowering your credit score. After 180 days of non-payment, credit card issuers can debit accounts, which means the unpaid debt is sent to a collection agency and the account is closed.

These strategies can help you deal with money avoidance and its negative consequences. Help is also available if your accounts are already in collection or if you are facing bankruptcy.

Put your bills on automatic payment

Morgan Dubie, a freelance web designer from Vermont, experienced bouts of depression as a symptom of bipolar disorder. “When you go into these bouts of depression, you can’t function,” she says. “Credit card bills meant nothing to me because everything meant nothing to me.”

Setting up automatic credit card payment is a way to meet your financial obligations while taking care of your mental health. Automatic payment can be configured as follows:

  • Minimum payout: Paying the minimum may cause a credit card balance to remain, which will earn interest, but at least you’ll avoid late payment charges.
  • Statement balance: Clear your entire monthly bill, as long as you have enough money in the bank account you use to pay the bills. If you are overdrawn, the bank may charge an overdraft fee and you will have emptied your account of funds that may be needed for other expenses.

One thing to note: while autopay can be a useful money-saving solution, it can aggravate a tendency to overspend when you no longer need to log into your credit card account and check your credit card account. your spending history.

Freeze your credit

Some people request another credit card when an account is closed due to missing payments. “I’ve seen clients struggle to the point of having 22 credit cards to deal with their need to access funds instead of dealing with the original debt problem,” Agnew says.

Freezing credit from the three credit bureaus Equifax, TransUnion and Experian can make opening a new credit account a cumbersome task. Any credit card request cannot be approved until you request the freeze to be lifted. To do this, you will need to call the credit bureau or log into your account, and you may need to provide your unique PIN to authorize any requests to unlock your credit.

Work with a credit counselor

The National Credit Counseling Foundation can help you develop lasting solutions to the effects of avoiding money. You can request a debt management plan, which consolidates all credit card debt into one payment, potentially with a lower interest rate. Credit counselors also offer advice on how to deal with debt collectors and bankruptcy. Many of these counseling services are free or low cost.

Prioritize your mental health

Dubie says getting out of credit card debt took time. She used some of the money she earned from freelance gigs to make payments, and she relied on financial apps to track her progress.

“They helped me see that I’m better today than yesterday,” she says. But the most important key to regaining financial stability was taking care of your mental health. “That comes first, otherwise nothing else will work,” says Dubie.

Swantner agrees. By addressing the guilt, shame and fear around money, you can make meaningful and lasting change, she says. Our Mental Health has the power to permeate every corner of our lives, and when we’re faced with multiple financial decisions in a single day, it’s essential to take care of ourselves as we get our financial affairs in order.

Return your script

“Money script” is a term coined by psychologists Brad Klontz and Ted Klontz that refers to a typically unconscious belief about money that is formed during childhood. A product of life experiences and role model messages, money scenarios exert a powerful influence on our daily lives.

For example, if your money script says credit cards are dangerous, you might be ashamed after opening a credit card account and then ignoring alerts or credit statements. Someone else’s money script might convey the belief that credit card debt is better than losing access to money. Credit card bills may not be paid to preserve cash.

By rewriting your money script, it is possible to improve your relationship with credit cards. This process begins with understanding how the money script influences your feelings and behaviors, Swantner says. She also notes that monetary scripts have developed to protect us, although they don’t always make sense. Understanding this is “the difference between condemnation and self-compassion,” she says.

Changing a story you’ve been telling yourself for years might not be easy, but it’s definitely possible. Consider working with a financial therapist, licensed financial advisor, or mental health professional — or maybe all three.

“It’s not a sign of weakness to ask for help and advice,” says Agnew. “It takes a lot of courage to face your finances head-on.”