Although we are not currently in a recession, there is still a lot of stress among people. A BW survey revealed that 85% of Americans are concerned about tariffs, with 45% fearing that tariffs could lead to a recession.
Experts are also expressing their worries. J.P. Morgan Research recently increased their probability of a recession in 2025 to 60%, up from 40% at the beginning of 2024.
Bruce McClary, from the National Foundation for Credit Counseling (NFCC), emphasizes that while there is a lot of uncertainty, there is also comfort in being informed and taking the necessary steps to control what you can in uncertain times.
Even if you are currently financially stable, it’s important to increase your financial resilience. This includes paying attention to your credit health, which can provide you with more options during tough times.
Regardless of the economic situation, taking these actions can help you feel more prepared to handle any challenges that may come your way.
1. Review your spending
The first step is understanding your income and expenses, followed by analyzing where your money is going. Utilizing AI-based budgeting tools can help you quickly track your spending habits and create a plan.
Tools like ChatGPT can assist in categorizing your expenses and provide visual representations of your spending patterns, aiding in better financial planning.
2. Check in on your emergency fund
An emergency fund is not just for medical emergencies but also for unexpected expenses. Building this fund can provide a safety net during financial uncertainties.
By adjusting your budget, you can allocate more funds to your emergency savings, helping you avoid accumulating debt in case of unforeseen circumstances.
3. Keep your credit scores in good shape
Maintaining a high credit score can provide you with more financial options and better access to credit during uncertain times. Paying bills on time and monitoring your credit health are essential steps to safeguard your credit scores.
During economic downturns, lenders may tighten their lending criteria, making it crucial to maintain a good credit score to qualify for loans and credit cards.
4. Make a plan for debt repayment
Having a structured approach to debt repayment can help you manage your finances effectively. Consider debt consolidation to lower your interest rates and save money as you pay off your debts.
Prioritize higher-interest debt and explore options like personal loans or balance transfer credit cards to consolidate and manage your debts more efficiently.
5. Look for card benefits that matter to you
Exploring credit card rewards and benefits can help you save money and access valuable perks. Consider cards that offer cash back, travel rewards, or no-interest offers to maximize your savings and financial flexibility.
Your credit card may offer additional perks that can be beneficial, such as
cell phone
and travel insurance, saving you from having to purchase these protections separately.
Additionally, your card might allow you to spread out payments for a recent large purchase
in installments
. Many credit cards now offer this feature, but some cardholders are unaware of it,” said John Cabell, managing director of payments intelligence at J.D. Power.
While these benefits can help you save money, it is crucial to fully understand their terms. Nagahashi shared a cautionary tale of a member who used a card with a no-interest promotion for a large purchase without realizing the consequences once the promotion expired.
“Always pay attention to the terms and conditions,” she advises.
6. Don’t hesitate to ask for help
If you are struggling to pay your credit card bills, do not avoid contacting your card issuer. Be prepared with details about your financial situation and reach out to discuss possible adjustments that could help you during this period.
It is better to seek assistance
before
missing payments, as issuers are more willing to work with you in such situations. Waiting until your credit card bill is over 90 days overdue can make it harder to negotiate.
“Your credit card company may not be aware of your current financial challenges,” says McClary. “By reaching out proactively, you can explore alternatives to prevent your debt from escalating.”