6 Ways to Use Credit More Responsibly


Filed under: Financial tips


When you think of financial planning, you probably focus more on saving and investing. And yes, these are important parts of your financial life, particularly with regard to preparing for retirement.

But there’s another large component of sound financial planning, and it involves your spending. Not only is your budget important, but how you spend money will impact you for years to come.

Credit card use is one of the most misunderstood parts of financial life. With American households holding more than 1 trillion dollars in credit card debt, and the average household paying over $1,200 in interest each year, it’s clear that we all could learn a few lessons about using credit to our advantage (rather than disadvantage).

Plus, your credit score will continue to impact you even after you retire, because things like car insurance premiums and home refinance options are based on your score. So, follow these six rules to use credit cards more responsibly.

Research first. It’s tempting to accept any splashy card offer you receive, but many of those rewards programs aren’t really all that great. Spending a thousand dollars to receive a ten-dollar in-store credit isn’t worth your time. Research the cards with generous cash-back options, and apply only for those.

On that note, don’t hold so many cards. You need two or three good credit cards. Having too many open accounts (all those store cards with silly benefit programs) can actually hurt your score in the long run.

Don’t carry a balance. Okay, so it might be too late for that. But avoid increasing your balances any more. Only charge what you can pay off by the end of the month, and look for lower-interest ways to finance emergency purchases.

Negotiate. All it takes is a phone call, and many card companies will waive your first late fee, drop annual fees, or even lower your interest rate.

Investigate terms and conditions. Some terms and conditions sound great upfront, but they come with strict limitations. Make sure you understand how to use each card to your benefit.

Stop paying high interest. High interest rates are the main reason so many of us get stuck with credit card debt for years. Research 0-interest or lower-interest balance transfer options (watching out for fees, of course), or consider a consolidation loan to get your debt under control.

Make a plan to get out of debt now, so that you won’t have to carry those card balances into retirement. If you have any questions, please give us a call. We can help you analyze ways to free up extra cash in your budget, and decide how to put those extra funds to your best use while planning for the future.


If you would like more information or have specific questions, please contact us using the following form. We would be happy to assist you.

This information has been provided by a licensed insurance professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting the insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax, trust and estate, or investment advice. Infinite Wealth Advisors is not an investment advisory firm.  Investment Advisory Services provided by NAMCOA® – Naples Asset Management Company®, LLC, a federally registered investment advisor, website: www.NAMCOA.com .