Whether you have fantastic credit and can pay off all your bills in a timely fashion every month, or if you have been experiencing challenges and are working to repair your financial standing, one thing is certain in any case: it’s important to keep the reins tight on credit card spending and a watchful eye on your report for errors that are all too common.
Most of us started out with one credit card after getting a job in our early twenties or thereabouts. Even with a minimal credit line, it was exciting to have a piece of plastic nestled in the wallet, perhaps used for buying a new suit or a dress for a job interview or some household goods for that new apartment or small home. Small payments were required and met. But somewhere along the way, as all those new credit card offers just kept arriving in the mail with only a bit of information and a signature required, a stack of plastic—and a pile of monthly bills—may have insidiously inched their way into your life, wreaking havoc on your finances. After that, all it takes is an unforeseen illness or accident or the loss of a job, and suddenly what was once completely manageable in terms of credit and finances overall becomes a slippery slope indeed.
To maintain a healthy financial outlook, it’s important to remain as modest as possible in terms of debt. This makes it easy to organize your finances—and sleep more soundly at night. The rules are simple, as hard as they may be to follow:
- Pay with cash whenever possible to avoid spending too much.
- Keep all debt to a minimum, and working on cutting out extra expenses.
- Check your credit report intermittently during the year and report (and follow up on) any errors.
- Create an emergency fund in case of illness, unemployment, or unforeseen issues.
- Put money toward retirement, especially taking advantage of 401(k) plans where the employer will match your contributions.
- Make investments for the long run, planning for your financial future.
It’s also important to note that there is a difference between what’s good for keeping your finances straight and what’s good for maintaining an attractive credit report. While simplicity is key, if you are shooting for that high credit score, you need to play the game a little. This entails a system of applying for a variety of types of credit, spending a little, and then re-paying on time. The key is not to fall down on the job during the repayment part.
To establish a stellar report, it’s good to have some revolving credit, showing that you are actively using it and then paying for it reliably, keeping a low balance. Get a couple of low interest credit cards going, keep them up, and that will show that you are responsible—and currently so. Add a mortgage loan which is paid on time each month. Take out a modest car loan and pay that reliably too.
Whether you are maintaining good finances or just rebuilding them, the secret is in having good spending and paying habits all the time.
If you currently have credit-card debt issues that are of concern or if your finances need an overhaul, an experienced attorney from Fitzgerald & Campbell, APLC can review your case and discuss all the available options with you. Our attorneys have decades of experience in serving clients as they navigate through challenging financial situations, to include bankruptcy and other debt management processes. Let us review your case and discuss what would work best for you. We are here to help!