Money Rule #2 Pay Your Credit Card Balance In Full Every Month
Keeping a running balance on a credit card or two does not necessarily help to build a healthy credit score. When you use the card and pay it off every month, your credit score fares better than carrying a balance. PLUS, you aren’t paying extra money to the bank for the convenience of using that card. And paying off your balances every month helps to keep you on a reasonable budget – “pay yourself first”!
But what if you have one or multiple credit cards with balances that you keep on paying but don’t seem to get any closer to paying off? There are various strategies and non-profit organizations that can help you get your credit situation back on track. Contact us for a list of resources and helpful strategies.
Are Reward Cards Worth It?
You love your ___ Rewards credit card, but remember: Credit card companies are in it for long term gain and they find that reward card holders earn them much more money than it costs to bring them in. While 38% of people regularly redeem their points for freebies like cash back and airline tickets, 31% of cardholders have never redeemed their rewards. Much of the time Rewards cards encourage additional spending, certainly adding to their profit. Opting for the Cash Back Reward is typically a better option, but as long as you actively use the Rewards you’ve chosen and you pay your balance every month, enjoy!
(Inspired by: “The Index Card: Why Personal Finance Doesn’t Have To Be Complicated” by Helaine Olen and Harold Pollack; Random House, 2016)