Sure, it’s important to know the sep ira rules when it comes to investing, but it’s a good idea to take a step back and take a look at something that gives you an overall impression as a borrower, can affect the interest rate you’re given, or make or break the approval process: your credit. The major factors that make up your credit are payment history, balance compared to available credit, length, and any new credit inquiries on record. The higher the score, the more you can take advantage of the best interest rates on the market, which will save you money. Your credit is something you should ensure you’re on top of and try to gain full understanding of how important it can be to your financial future.
Check Credit Report Regularly
These days you just never know how access to your information can have, whether it’s stealing your card information at the gas pump, taking a picture if you leave your card out for too long while paying a bill, or even be a victim of a store’s breach. Even credit bureaus aren’t safe anymore. In order to ensure that all of your accounts are up to date an accurate it’s a good idea to pull a free copy of your credit report from annualcreditreport.com. While it will not have your score, you can view your score on your monthly credit card statement to keep your eye on.
A Low Credit Score Can Cost You Money
If you go to take out a mortgage, a percent on or off the interest rate can have a huge change on the monthly payment, depending on the balance, adding up to hundreds, if not thousands, a year just in additional interest. While a low credit score could mean your denial, the higher your credit score will mean lower interest rates and lower monthly payments, which frees up extra money to build an emergency fund, pay down debt, or increase retirement contributions so you can have adequate funds to continue your lifestyle when you do decide to walk away from work.
As something a family member used to say, everything is negotiable. Why pay more than you have to. There is no one that will automatically save you money, so you need to work for it a little. Much like calling on your cable bill, threatening to cancel, until they lock you in to a lower rate, you can do the same with your credit card. There is so much competition for business that while it’s unlikely they will give you 0% if you asked, but maybe you can meet somewhere in between what you’re currently paying and where you expect, so they can keep your business and you can save money on interest going forward.
Don’t Miss Out on Credit Card Rewards
Using the right credit card is important for saving money on interest if you were to carryover a balance to the next month and get charged, but what about the purchases you make that you are able to pay by the due date? Probably the best reason to use a credit card is for the rewards, which you can earn points or cashback on the purchases that you were going to make anyways, making that free money if you didn’t take advantage of otherwise. If you can use a credit card responsibly, I would look for the best rewards card you can find and enjoy seeing them add up. Just make sure not to over charge just for the rewards, otherwise you may have trouble paying the balance, be charged interest, and that would defeat the whole purpose of the rewards in the first place.
Balance Transfer/Consolidation Loan Can Help
You’ve probably seen plenty of offers for balance transfers come through, but maybe you haven’t taken them as serious as you should. If you’re in debt now and paying a high interest rate, it can make sense to transfer the balance to another card for their promo rate of 0% interest for a set period of time so you can hopefully rid yourself of the balance. In addition, a consolidation loan may make sense as well, a set interest rate for a predetermined number of months to pay off.
Minimum Payments Only Satisfy the Account
If you find your self with a credit card balance, while making the minimum payment will satisfy your account for the month, it will do little to the balance, so it’s important to make the largest payment you can afford until the balance is finally gone.