*I originally wrote this back before the holiday season but a lot of the information still applies. Anything relates to this type of stuff will be labeled Sassy Finance then the name of the topic
I have spent a great deal of time working in the financial services sector and something I have found is that everyone needs to be financially savvy, as it is one of the boring life things that you learn and it helps you all of your life. This page is me providing over a decade worth of financial tips and advice from working with individuals and families from all backgrounds. If you have a specific financial topic you want me to write about, email it to me at firstname.lastname@example.org
November 28, 2017- Credit Cards
Hey Sassy Nation!
I know the holiday season is upon us, and with it you should be financially careful and I think it is the perfect time for me to share some information with you about credit cards. Let me start off by saying I don’t think credit cards are bad you just need to use them correctly and use them to your advantage. I know that many of you are getting your holiday shopping done and at many stores or websites you will be offered some sort of credit card. I want you to keep in mind a few things as it relates to credit cards:
- A discount only works on a credit card if you plan to pay it off in full by the time the bill arrives. I have seen it all too many times, people see something on sale but don’t have the cash to purchase it fully. They then say that if they put it on a credit card they can still get the sale price. Well, this is partially true. Yes you can put it on a credit card but considering the fact that the average interest rate on a credit card current exceeds 20%. That interest rate will eat anything you saved on price of your purchase. Keep in mind that if you do not pay a credit card bill in full when the bill arrives you end up paying ongoing interest. So the 20-30% you saved at the department store just got cancelled out by the interest on you credit. So keep that in mind when you plan to put a sale item on one of your credit cards.
- When you apply for a credit card at any department store you give them the authorization to pull your credit report. One of the most frequent questions I have gotten is what does this do to your credit score? The answer is that every time someone is extending you credit they will pull your credit report and doing that does drop your score. Later on you will get points back on your credit score you make on time payments and you keep you balance low. Even if you apply for a credit card just to get the discount they are offering and don’t actually get approved that will drop your score.
- If you do apply for a credit card and they tell you that they will mail you a letter that means you did not get approved, however the letter will also tell you why you didn’t get approved which can help you determine what you need to do to make your credit better.
- Maxing out your credit card will also drop your score, keep in mind 30% of your credit score is based on the amount of money you owe. The more you owe the higher risk of a consumer you are and that will drop your credit score.
- Check your credit report. This is prime season for identity theft, check your credit report to make sure that no one has opened up lines of credit in your name without your knowledge. You are entitled to one free credit report a year from https://www.annualcreditreport.com/index.action
- The Consumer Financial Protection Bureau has some great information on their site regarding credit card. Go check them out at: https://www.consumerfinance.gov/ask-cfpb/category-credit-cards/
I hope this gives some of you some basic information as it relates to the holiday season. Should you want to see future post on a specific topic or want to ask me a question(s), feel free to send me an email at email@example.com
Have a sassy and financially safe holiday season!