This month’s Get Smart about Credit Day gives us a great opportunity to get on the right foot with credit. If keeping up with credit card balances has become a challenge, it’s smart to assess your overall financial picture and your spending habits. Remember: taking on credit card debt is borrowing    money    you    haven’t    earned yet. It is smart to keep the focus on this fundamental truth. To  get  smart  about  credit  cards,  be  aware  of  the  common  warning  signs  that  might  indicate  issues  with  credit  card usage:

  • You are only able to make minimum payments on your credit card debt. Making only the  minimum  payment means   you’ll   end   up   paying   much   more  in  interest  charges,  and  it  will  take you longer to pay your debt off.
  • You have been denied credit. If you’ve been  denied,  take  a  beat  be-fore  applying  with  another  creditor. Applying   for   multiple   credit   lines within  a  short  period  of  time  can  result  in  a  lot  of  hard  inquiries,  which can  have a  negative  impact  on  your  credit score.
  • You find it challenging to set aside savings. If it is challenging to set aside savings on  a  consistent  basis,  review  your  monthly  budget  and  look  for ways to reduce spending to save a little from every paycheck.
  • Your credit cards are near or over your credit limit. Your creditors set your limit based on your credit his-tory, income and outstanding debt. If you are at  or  near  this  limit,  take  a  good look at your financial picture and focus on making smart purchase decisions  in  the  future.    A  good  rule  of  thumb is to try to keep your balances below  50%  of  your  available  credit  limits.
  • You are taking cash advances from cards to pay your other bills.
  • Collectors are calling. Receiving calls from creditors happens to many people.  You can relieve this financial stress by figuring out a budget with a financial    counselor    and    reviewing your options to start paying debts back on time.
  • You are using one credit card to pay off another credit card. This is like digging one hole to fill in another hole –and usually the hole just gets deeper and deeper!

 

A Smart Approach to Credit

Smart use of credit cards is part of financial wellness.  Managing credit is possible with planning and the under-standing of how credit can affect your financial future. It’s  all about the basics:  looking  at  monthly  expenses,  looking  at  income and setting spending priorities as well as building up emergency savings. These principles will continue to be the building blocks of achieving financial success! Through our partnership with  Greenpath Financial   Wellness, you have access to a trusted independent nonprofit resource to help you  #Get Smart about credit. Financial counselors  lend  an  empathetic ear,  look  at  your  entire  financial  picture  and  can  help  you  develop a customized plan to achieve financial wellness.

 

This article is shared by our partners at GreenPath Financial Wellness, a trusted national non-profit.

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