Five Credit Card New Year's Resolutions You Should Make

Taking charge of finances is a widespread New Year’s resolution! I’ve got five excellent credit card resolutions you should make to help keep yourself on track financially:

Don’t make late payments.
Don’t use too much of your available credit.
Don’t take out cash advances.
Don’t apply for numerous credit cards.
Don’t pay off your credit card too quickly.

Don’t Make Late Payments

There are several drawbacks to paying your credit card balance late:

You’ll have to pay interest on your balance.
You may see your interest rate rise.
You may have to pay fees on top of paying interest!

If you’ve got an issue with not remembering to pay your credit cards on time, one good option is to set up automatic payments on your credit card due date. If, however, you have concerns you may not have enough in your account to pay your bill, set yourself up a reminder at least five days before your credit card bill is due so you can plan appropriately to ensure you pay as much as possible on your bill.

Don’t Use Too Much Of Your Available Credit

You may be wondering about this tip and why it’s crucial. It comes down to that the more you spend on your credit cards, the more you’ll have to pay off eventually – and this can be a real issue if you suddenly lose your source of income!

I recommend using no more than 75 percent of the credit available on your credit card – and even less if you have a very high limit.

Don’t Take Out Cash Advances

There are several good reasons not to take out cash advances on your credit card:

The interest rate for cash advances is higher than if you charged the item to your card.
There’s no interest-free grace period for cash advances – you’ll be charged interest immediately!
You don’t earn any reward points on cash advances.

If you find yourself short on cash, try to find ways to boost your income or cut back on your spending.

Don’t Apply For Numerous Credit Cards

If you apply for numerous credit cards, this can be considered “shopping for credit.” This can work against your overall credit rating!

In addition, having a lot of credit cards can lead you into temptation – and you run the risk of not being able to pay off your cards or not being able to track when all your cards are due. And this means you’ll rack up fees and pay a lot of interest!

Don’t Pay Off Your Credit Card Too Quickly

This may sound like an odd tip, but it has merit. If you’re using your credit card to build a credit rating, paying off your card too quickly can work against you.

By waiting until you get your bill (either a paper bill or electronically) and then paying off your bill, the credit scoring system can register that you’re responsibly using your card and paying your bill off on time!