The bestselling author of "Women & Money" and host of the "Women & Money" podcast says that scraping any extra money together and putting it aside in an emergency fund to cover basics like food and heath care is more important than paying down debts, regardless of the damage it may do to your FICO score, according to a profile of Orman in The New York Times.
Orman has long recommended that everyone save up an emergency fund that could sustain you for 8 to 12 months. She has in the past, though, also recommended prioritizing paying off debt as quickly as possible.
"Can you believe Suze Orman's telling you to please use your credit cards?" Orman said during an appearance on NBC's "TODAY." "And only pay the minimum amount due. You might even want to call your credit card companies and ask them to expand your credit limit."
Though Orman generally recommends paying off debts first, at a time like this, she believes, your emergency fund should be your priority.
Many Americans already have increased their credit card usage: Some 23% of consumers, or about 28 million people, have added to their credit card debt as a direct result of the Covid-19 outbreak, according to a recent CreditCards.com survey of 2,552 adults.
If you are charging more purchases these days, credit experts suggest you proceed with caution. Even if you've had a disruption in income, you don't want to ding your credit score or rack up large balances if you can avoid it.
Orman's "advice is really for people who are in a very tight spot. Perhaps they're unemployed, they don't have savings — they're really in a pinch," says Ted Rossman, industry analyst at Bankrate.
"If you're in a more stable situation, then yes, by all means, keep up with your credit card payments and try to pay down those balances. But if you're struggling, the credit card shouldn't be the first bill you pay. You need to focus on basic needs first," says Rossman.
Here are three ways you can be smart about using credit during a crisis and in general.
If you do have to put more everyday expenses on your credit card and you're having trouble paying your bills, don't hesitate to ask for relief. With so many Americans experiencing economic hardship, many issuers are giving cardholders a break right now.
"If you need help, be proactive and reach out to your card issuer," says Benet Wilson, credit cards editor at The Points Guy. "You'd be surprised willing they are to work with you."
"Issuers are offering things like removing minimum payment requirements on credit cards, waiving or refunding different fees and not reporting payment deferrals such as late payments to credit bureaus for up-to-date clients," Wilson told Grow earlier this month. "It's best to check with your card issuer to see what help is available."
Video by Ian Wolsten
Experts recommend paying off your credit card balance on time and in full each month. But if you can't, consider getting a 0% balance transfer card.
A balance transfer allows you to move an outstanding balance from an existing credit card to a new card with a low or even zero interest rate.
"Transferring a balance can save you a ton of interest and can help your utilization rate," says Matt Schulz, chief credit analyst at LendingTree. That way, you won't have compound interest working against you and adding to the balance. By opening a new card, you'll also add to your overall credit limit.
"It might be harder to get that balance transfer credit card today, during the pandemic, than it was a couple of months ago," he says. "However, it is still worth trying."
Video by Mariam Abdallah
If you have to use credit, cash-back rewards cards could provide some relief by providing bonuses in categories where you spend the most.
If you're using a credit card to pay for groceries, consider a card that offers a bonus in that category. When you're using a card that offers an additional 4% or 5% cash back in the categories where you make frequent purchases, shoppers are less likely to chase rewards and get savings on everyday purchases they'd make otherwise.
Be careful with rewards cards, though: If you carry a balance, that will probably end up offsetting any potential savings.
For example, the Chase Sapphire Reserved and Preferred cards, which usually allow customers to earn points that can be used toward rewards, are now offering enhanced rewards on grocery spending for a brief period. You can earn 5X points and 3X points, respectively, per dollar spent on grocery purchases on up to a maximum of $1,500 in eligible purchases from May 1 through June 30, 2020.
The bottom line for those experiencing hardship? You have options. "Save your money to get through right now, because these are hard times, but you can do it, people," Orman said on "TODAY." "You have what it takes."
More from Grow: