There is very little spoken of it, because it is the scandalous impulse of instant gratification usually. There are self-help groups, professional counselors, and the suppliers themselves who warn against it. It is the epitome of the term ‘Buy now, pay later’ mentalities, and yet most of us are guilty of this at one time or another in our lifetimes. It’s credit card usage and although overdue, probably one of the most seething articles I will write.
It is always surprising to me how much money is, in my opinion, wasted on fees and interest when carrying a credit card balance. It’s even more surprising when I hear someone say they had to pay one card payment by using another credit card. 🤑 only begins to describe it for me. So how should credit cards be utilized? I’m going to start with personal credit on this post but the basics can be for business credit as well.
Credit Clue #17: Keep card balances at no more than 30% of the limit-ever. Ideally 20% is standard in the industry.
I’ve wrote that before but most are unaware of this so pass it on to family, friends, neighbors. Teach your children and grandchildren. It’s that important yet I don’t recall seeing it in my business class textbook or any textbook for that matter. Yet by abiding to this simple concept not only will you be savong in interest but your credit score will be higher and allow you to be approved for other loans faster, easier, and at better terms.
It is not always best to close credit card accounts if you are looking to boost your credit score either.
Credit Clue #18: Older accounts kept in good standing (paid as agreed) can benefit your score especially if it is a few years old even if it is a simple gas card or department score card.
Which leads me to another little known fact;
Credit Clue # 19: Instead of opening another account ask every 3-6 months for a limit increase or lower rate of interest. Some lenders will agree every 3 months as long as you are paying as agreed.
Call or email your lender(s) today!
Credit Made Simple 