How to Negotiate Your Bills During COVID-19

By Kim Galeta
August 27, 2020

Almost one in three Americans have experienced income disruption due to COVID-19 (aka coronavirus). Not surprisingly, you may be wondering how to cover upcoming bills and ensure that there’s enough money in your bank account

But before you contact bill collectors, your first step is to make a list of all your monthly expenses and prioritize your “four walls”. This means taking care of your food, shelter, utilities, and transportation before anything else. While you’re at it, add health insurance to that list. All other expenses should be eliminated, reduced or negotiated

If you’ve never negotiated your bills before, we’re here to give you helpful steps. You’ll want to bookmark this page and refer to it as you navigate how to pay your bills and get financial help during COVID-19.

  1. Eliminate or Reduce All Unnecessary Expenses
  2. Explore Payment Options for Everything Else
  3. Take Advantage of Credit Card Balance Transfers
  4. Contact Your Service Providers and Creditors
  5. Hustle Your Way Through This Storm
  6. Avoid Payday Loans
  7. What If I Still Can’t Pay My Bills?

Eliminate or Reduce All Unnecessary Expenses

Comb through your bank statements for the past couple of months to see which recurring bills and subscriptions you can get rid of. As you go through this process, you might be surprised to learn that you’re paying for services you never use. The first time I did this, I found about $50 in random recurring expenses, two of which I don’t remember signing up for. 

Next, work on separating wants from needs. For instance, while a phone is necessary to make calls and access the Internet, do you really need unlimited data? If you own your device, consider options like Republic Wireless. This cell phone service provider charges only $5 per month for each gigabyte of data, in addition to a $15 base rate for unlimited talk and text. Ryan Reynolds’ company, Mint Mobile is another up and coming service provider with plans starting at only $15 a month (for a 3-month introductory offer).

Streaming services can also be paused until you can afford them again. In the meantime, you can take advantage of free trials for premium channels like Showtime and HBO. Crackle offers a ton of free movies as well. 

Explore Payment Options for Everything Else

Once you determine your new “bare bones” budget, try to have an emergency fund in place just in case you need the cash for an unexpected expense.

In the meantime, list out the minimum payment amounts for each of your other bills, like credit cards, personal loans, medical bills and so on. Determine how much you can reasonably afford to pay for each of these. 

Keep in mind that many companies are waiving late fees if you can’t pay on time. So, if you’re in a tight spot, reach out to your bill companies to find out if they offer any type of financial relief.

Take Advantage of Credit Card Balance Transfers

Lowering your credit card interest rate can give you some breathing room while you try to get a handle on your finances. If you have a strong credit score, you might be able to benefit from a 0% APR balance transfer offer. A few years ago, I took advantage of this to transfer $5,000 onto a credit card that gave me 18 months with 0% APR on all balances transferred. 

If you do this, just make sure you pay attention to the fine print. On my balance transfer card, for example, the APR went up to 28% on any remaining amounts after 18 months. 

Aside from balance transfers, if you’ve been making on-time payments consistently, most credit card companies are willing to negotiate a lower rate than your current APR. 

Contact Your Service Providers and Creditors

If you need some help lowering your bills, it may be time to reach out to your service providers and creditors. Here are some useful tips to keep in mind before you get started.

  • Have your account information handy – This includes your account number, monthly payment amount and interest rate, if applicable. Be sure to review your payment history and the length of time you’ve been a customer. If you’ve always been in good standing, be sure to mention this during your conversation.
  • Skip the chat and speak to a live person over the phone – Although using online chat options might be faster or more convenient, I prefer picking up the phone and explaining my situation to a human being on the other end. Just be prepared for long wait times.
  • Be upfront and clear about your circumstances – I recommend jotting down your talking points before you begin this process. For instance, you could say something like “I lost my income due to COVID-19 and I don’t expect to be rehired until after the summer.”
  • Be specific with your request – Here are two quick examples of how you can phrase your request:
    • “Based on my financial situation, I would like to cancel this service, is it possible to waive the cancellation fee of $99?” 
    • “My husband lost his income and I need to defer my monthly payments. I expect that I can restart paying on this bill in August.” 
  • Have one or two other offers in hand – When negotiating with credit card companies and cable providers, it doesn’t hurt to mention offers for similar services. They might be willing to match these deals.
  • Understand the fine print before you agree – Be sure to find out if there are any financial penalties for negotiating new payment terms. I always like to ask for a confirmation number or wait to receive an email before hanging up the phone.

Hustle Your Way Through This Storm

There are many ways to earn some extra cash quickly while you wait for unemployment benefits to arrive in your bank account or to start working again. Here are a few options: You could become an online babysitter (yes, there’s a budding industry for that), get certified as a virtual Pretzel Kids yoga teacher, mow lawns, or deliver groceries for Instacart or Shipt. Big retailers also continue to hire thousands of people across the country. 

If you want to start making money right away, you can also host a virtual yard sale or sell unused items on Facebook Marketplace. Another idea: sign up to participate in focus groups. My husband has been furloughed since the end of March and I signed him up to participate in focus groups via User Interviews. So far, he’s been accepted to two studies earning him a $10 Amazon gift card and a $20 PayPal payment for just five to 10 minutes of his time. 

Avoid Payday Loans

Payday loans might sound tempting when you need financial help, but simply put: they’re a bad idea. Payday loans are designed to be a one-time solution if there is literally no other option on the table. However, according to data from the Chamber of Commerce, you can easily find yourself in a dangerous cycle if you go this route. Around 80% of payday loans are “either rolled over into another pay period or followed by another payday loan within two weeks.” 

Instead, if you have to borrow money, consider an emergency personal loan from a credit union. Many offer low interest rates and some even have skip-a-payment offers.

What If I Still Can’t Pay My Bills?

If you have tried all the recommendations above and you’re still unable to cover your basic expenses, don’t despair. Reach out to local nonprofits, charitable organizations and churches for help. Communities are lifting each other up every single day during this crisis.

In the meantime, you can prioritize essential bills and take care of yourself. You will get through this.

Kim Galeta has been a professional writer since 2009 focusing primarily on personal finance but also dabbling in tech, health & wellness and small business. She holds an MBA in finance and corporate strategy from the University of Florida.

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