Category Archives: Credit Tips

Check out our quick and easy credit tips, archived from our monthly newsletter’s Tip of the Month section. Don’t miss our tips! Sign up for our newsletter in the header above.

Pay more than the minimum.

Making minimum payments each month is a guaranteed way to be stuck in debt much longer than necessary. For example, if you have a $5,000 balance on a credit card with a 15% annual percentage rate and make a minimum monthly payment of just 2% of the balance, it will take you more than 27 years to pay off what you owe, according to a Bankrate credit card calculator. Plus, your total payments with interest over that time will amount to $12,518—2.5 times what you originally charged to the card.

Simply by boosting your monthly payment to 3% of the balance rather than 2%, you can cut that payoff time almost in half. If you really buckle down and increase your monthly payment to 5% of the balance, you’ll wipe out your debt in eight years and pay about $1,600 in interest—rather than the roughly $7,500 in interest that would result from making 2% minimum payments. It might stretch your budget to make bigger payments, but over time you’ll save thousands of dollars that can be put to better use, building wealth rather than servicing debt.

Have a Healthy Relationship

Money is one of the leading causes of all fights among significant others, and can even lead to separation or divorce. If you want to have a healthy relationship and avoid arguing over money, these few simple guidelines will help keep you in line:

  • Create a budget and stick to it.
  • Save a little money for yourself each month, but NOT a secret account!
  • Open communication. Discuss everything else openly with your partner, including finances.

Pay Yourself First 

Most of us are diligent about paying our bills when they are due. The thought of living in the cold prompts us to pay our utility bill. Not wanting our property to be inundated with trash encourages us to pay the garbage bill and, of course, if we do not want to live on the street we take care to pay our rent and mortgages.

These are givens, but are we possibly neglecting the most important invoice of all?  Which one is that?  Glad you asked.  It’s the Family Invoice, the one bill that should be paid first, and it is your payment that should be made out to you!  Pay yourself first!  How?

Determine what 10% of your gross earning is. That amount should go into a savings account on the first of the month before you pay anything else. If 10% is not possible yet, commit to 5% or another amount that can be monthly without cessation. Just $100 a month will net you $1,200 at the year’s end!

Stop Impulse Shopping

Retailers make enormous profits from impulse shoppers. Have you ever noticed that magazines, candies, gums, children’s toys and trinkets are all lined up near the checkout stand? While you are standing in line waiting to check out, all these things are in your path and can be very difficult to ignore. If you have children with you, the urge to please (or sometimes appease) the little ones can be satisfied by buying one or more of the offerings.

This type of buying has gotten many consumers into debt that is almost impossible to remedy. The reason why is that we carry this mentality into larger purchases. It is impulse buying at its worse. So the first tip is to be reasonable about purchases and avoid impulse buying.