4 Steps to Managing Your Credit Cards

As new credit card regulations go into effect, it’s important to still follow some basic practices.

1) Start with the “need versus want” outlook for your purchases. For example, you “need” food for Fido the dog, but you “want” the rhinestone dog collar. Think before you use the credit card to fulfill a “want.”

2) Although credit cards are a convenient way to pay or to delay payments, paying in full each month is crucial. When you carry have a balance – and especially if you miss a payment – the cost of the item will be inflated. A missed credit card payment could significantly raise your interest rate to be as high as 29%. Not only has your interest rate gone sky high, but you could be facing a $40 late payment fee. Eventually, your monthly interest payment can be almost equal to your initial purchase price. By the time you get the credit card balance to zero, you need more food for Fido and the rhinestone dog collar is out of fashion!

3) Consider your credit score. Late payments and not paying bills can quickly damage your credit score. Although balance transfer offers sound like a helpful and immediate solution, paying off debt is a much wiser choice than moving debt from credit card to credit card. Don’t know where to start? Pay off the credit cards with the highest interest rates first.

4) Every time you apply for and open a new credit card your credit score goes down, so resist the urge to accept the offers in your mailbox. Raise your credit score by having lower balances compared to your credit limit and maintaining a longer credit history.

Using your credit cards with financial intelligence will help you maintain a healthy financial life. Good Luck.

About the author

Kimberly J. Howard, CFP®, CRPC®, ADPA®

Kimberly J. Howard, CFP®, CRPC®, ADPA® is the founder and owner of KJH Financial Services in Newton MA and Denver CO. She enjoys helping clients explore and achieve their life goals through effective comprehensive financial planning.

Kimberly holds a Master of Science degree in Computer Science Information Management from Boston University. She earned a Bachelor of Science degree in Mathematics and Physical Education from Stephen F. Austin University in Texas. She attended Boston University for her Certification in Financial Planning and H&R Block for Tax Preparation Certification.

Kimberly is currently an adjunct faculty member at MetroState University where she teaches General Financial Planning Principles, Income Tax, Retirement Planning and Estate Planning. She is a past adjunct faculty member at Boston University and The College for Financial Planning.

Kimberly is a member of the Financial Planning Association (FPA) and The National Association of Personal Financial Advisors (NAPFA). She was named to the Metropolitan Who's Who Among Executive and Professional Women. She is an expert Advisor for Nerdwallet, BrightScope, Morningstar, and FiGuide.

Kimberly promotes a life planning approach with a balanced work/life style. She is active in sports including cycling, golf, skiing, and hiking.

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