Guest Post: Getting Right with Credit Cards in the New Year

So this article was submitted as a guest post and I wanted to add a few points here and there so they’ll be in italics. One of my biggest spending habits was a daily coffee addiction. Cutting that out saved me a TON of money.

Getting Right with Credit Cards in the New Year

Credit card debt is one of the biggest financial problems facing numerous households in America, and for many, their New Year’s resolution this year is getting their financial house in order. The average household is burdened by nearly $16,000 in credit card debt – that’s a substantial amount of cash that could be put towards college tuition, a mortgage, or a new car.

We have more debt that than and we even had WAY more debt than that the year before. I actually thought the average was even higher.

To get their finances under control, many have vowed to get their credit cards under control. So if you are one of these households that are trying to limit their credit card usage to a healthy limit in the New Year, consider trying some of the following:

Limit the Number of Cards You Use

or don’t use any yep, my crazy idea!

Don’t use every single card you ever applied for as doing so is a great way to have out of control spending and one too many bills to pay at the end of each month. Instead, stick to using the cards that offer rebates, such as a cash back credit card, or a card that doesn’t charge a foreign transaction fee while traveling. Also, try to stick to using the cards that you have the longest established line of credit with. These cards most greatly impact your credit history, and will keep you looking while a worthwhile lender.

Pay Balance Off Each Month

if you choose to use credit cards you must do this one, pay them off!

To avoid paying for high interest, make sure that you pay off your credit cards each month. Doing this will not only keep you from overspending on your credit cards, but it will also help you keep positive credit lines. In addition to the moneysaving perks, doing this will keep your debt-to-income ratio low which can help you obtain better rates for home and car loans in the future.

Re-Evaluate Spending Habits

Often, those charges that make their way on to our credit cards are frivolous. We charge that fancy coffee we don’t need or that new dress that looked so cute on the mannequin but has sat in our closet ever since. You know the types of purchases I am talking about. On occasion we charge necessary, emergency expenses such as a new transmission for the car, but if you are able to actually consider the typical purchases you make with your cards, you may be able to actually limit your charges to necessities only.

Getting your finances under control will most likely not be an easy task, but doing so will definitely improve your overall quality of life in the future. While it may require you to limit your shopping sprees or start making your coffee from home, better managing your finances will give you the extra money you need in your pocket to save for bigger expenditures – such as your kids’ college funds.

Thank you to Amanda for submitting this guest post.