Wise Ways to Use Your Credit and Money
Here are 8 tips that will help you use your credit wisely. Following these principals should help increase your credit score and standing.
- Make all payments on time. Don’t wait until the last minute to send a payment.
- Pay off the entire balance every month. You’ll never be charged interest this way.
- Avoid credit cards that charge an annual fee and excessive penalty fees.
- To build credit, consider applying for credit cards from a gas station or retail store. Again, pay off the entire balance each month in full and on time.
- Build an emergency savings fund you can use to pay off your credit card bill in case you need to make a large purchase on credit (such as car repairs or an unexpected medical or dental expense) or you lose your income. Most financial planners suggest putting 10-15% of your income away until you have a minimum of three-months of expenses in savings, though six is not uncommon.
- Never make a purchase on credit you do not plan to pay off at the end of the month.
- Cars and trucks wear out. Plan now to buy your next vehicle by depositing $200-300 per month into a separate savings account. This will minimize (or hopefully eliminate) your need to borrow money to buy your next car. Consider buying a “recently-new” car, still under warranty, instead of a brand new vehicle.
- Avoid high-interest and high-fee Payday loans, Check Cashing, and Title Loan services.