Credit Card Mistakes We Hope You Aren’t MakingJanuary 12th, 2014 by The JetSetter Team | Comments Off on Credit Card Mistakes We Hope You Aren’t Making
Tis the season—for a lot of things, really. For getting and giving and peppermint lattes. For traffic and returns and, unfortunately, excessive credit card debt. For many, the decision to use a credit card makes a lot of sense, and when managed properly, they can be a great asset. To best utilize this financial resource, there are a few things to be wary of.
First, do not be enticed by sign-up bonus offers or cash back rewards programs. These promotional offers are great, but may not ultimately be worth the cost of the credit card. A discounted plane ticket will be helpful for the purchase of one or maybe two tickets, but the card and fees associated with it will be with you for longer.
If you’ve already got a card that offers rewards, be careful about spending money just to get rewards during periods of promotion. You might accidently cap out your rewards and end up spending money you don’t have, or pay excessive interest. Make sure your spending is based on what you have and need and not on getting a few extra reward points.
Next, view your credit card in the same way you view your debit card, which is to say that you shouldn’t spend more than you can afford. Though you may have a $5,000 limit, you don’t have to max it out. Make sure you’re able to manage the payments and actually pay off your balance and you’ll avoid paying a lot of interest or a bunch of late fees.
Finally, think before you close credit cards. A big factor in determining credit score is the age on all of your accounts. If you’ve been with a particular company for a lot of time, your score will be higher because you’ve shown that you can maintain this financial relationship. Keeping old cards (even if you don’t use them) makes your credit score higher. For cards with no annual fee, consider leaving them open. You might also make an occasional purchase to ensure that they aren’t closed due to inactivity.
And with all the money you’re saving, think about investment opportunities! Jason Hartman has a lot of good ideas for diversifying your portfolio and maximizing your income, so make sure to check out the blog, and podcasts to get the most up-to-date information about the market and your place in it. (http://www.flickr.com/photos/[email protected]/7113235069/)
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The Jetsetter Show Team