Credit cards
When used correctly, credit cards can be a great tool in financial planning when it comes to reaching financial goals. When used incorrectly, poor credit can be devastating to your finances and your financial well-being.
Advantages of Credit Cards
- Convenience
- Credit card statements can help you track your spending
- Incentives and rewards earned
- Helps build your credit score
Disadvantages of Credit Cards
- Easy to spend beyond your means
- Fees if not paid on time or paid off each month
- If you only make the minimum monthly payment which is a small fraction of what you owe, the balance will accrue interest and cost you more over time
- Fees for cash advances
- High interest rates
Credit Tips
- Create a budget and stick to it.
- Manage your accounts: keep your balances low and make your payments on time.
- If you are having trouble paying, contact your creditor. Don’t wait and hope it gets better.
- You can request a free copy of your credit report every 12 months.
- Credit cards don’t hurt your credit score as long as you make your payments on time.
Resources for Credit Reports and Scores
The聽Consumer Financial Protection Bureau聽has a variety of resources for personal finances including credit cards, student loans, and managing your money.
聽– Learn about finding the right credit card for you, applying for a credit card, paying off a credit card, and other credit related topics.
聽– Learn the difference between credit reports and scores, what factors affect your credit score, and how to identify fraud or theft on your account.