The Cut: This Recession Scare Feels Different. Here’s What to Do About It.

EXCERPT OF AN ARTICLE BY CHARLOTTE COWLES, ORIGINALLY PUBLISHED IN THE CUT march 20, 2025

CONSIDER OPENING AN EMERGENCY CREDIT CARD OR TWO.

Obviously, the best way to prepare for a recession and/or layoffs is to save up an emergency fund. But that’s annoying advice for the 42 percent of Americans who haven’t done so and can’t just snap their fingers and make it happen. If that’s you — or even if you do have a healthy cushion — it never hurts to open a no-fee, zero-interest credit card for a backup, says Georgia Lee Hussey, a certified financial planner and the chief executive of Modernist Financial.

“Hopefully you won’t need it, but if you lose your job or have a big surprise expense, you could put it on the zero-interest card and pay the minimums until you get back on your feet again. I’m also asking for credit limit increases on all my credit cards.”

Of course, you want to be strategic about this — opening a bunch of cards and increasing your limits all at once can damage your credit score. “Instead, open one, maybe wait a week or two, see what it does to your credit score, then apply for another one,” she says.

Think about switching to a credit union.

“I recommend using credit unions instead of big banks because they are legally required to benefit their members, not shareholders. If the FDIC shrinks, there’s more potential for instability in the banking industry. Right now, I don’t trust the federal government to act responsibly if there’s a banking crisis. But I do trust state governments in places like California, New York and Illinois, where there are large financial industries. Those state governments are more likely to step up and secure their state-based banks and credit unions if they need to.”

To explore credit unions available to you, check out the National Credit Union Administration website’s locator tool.

Don’t panic. Recessions are to be expected, and they do end.

“We should expect downturns to happen, on average, every five to seven years. So there’s nothing wrong with markets going down — it’s part of the cycle of expansion.”

In the meantime, Hussey recommends channeling your anxieties into other actions.

“Volunteer, get involved, limit news and market intake to help manage your nervous system, do some financial spring cleaning if it makes you feel better. Talk to people from other countries that have been through coups or faced major upheaval and ask them how they got through it. If you weren’t deeply affected by the last major recession, find someone who was and ask them what they did.”

Their stories may not be comforting, but they will give you an idea of what’s possible, and what resilience can look like.

Finally, think about what you’re currently doing with your resources — which include money as well as time, skills, and relationships.

“We have a lot of power in our purchasing decisions,” says Hussey, who recommends Progressive Shopper, a free plugin that enables you to see whether a retailer supports your values. “There’s a lot that’s outside of our control, but there’s also a lot of things we can do.”