How often do you pay your credit card(s)?
A. I pay them off every pay day.
B. I pay them off every month after I receive my statement.
C. I pay on them monthly, but carry a balance.
Why do I ask?
Did you know that the amount on your statement is what is reported to the three major credit bureaus each month?
That means that even if you pay your balance on the day you receive your statement, the credit bureaus will show you have a balance.
This affects your credit score.
Which affects how much to pay to borrow money.
The better your credit score. the less you pay to borrow. If you want those low interest credit cards or 0% financing on a new vehicle, you better have an excellent credit score.
This is generally over 700, but can vary by lender.
So what can you do?
ACTION STEPS
1. Use your credit card(s) as if it was your debt card. Only buy what you have money in the bank to pay.
2. Pay off your credit card balance every pay day.
3. If you cannot pay your credit card(s) in full, have a plan to pay it/them off as soon as possible.
4. Keep your oldest credit card active. Having a long term open credit card helps your score. Even if you only use it once per year and pay it off right away.
5. Keep saving and investing while you are paying down your credit card balance(s). You will always have debt so learn how to manage it. It will not do you any good if you pay off your credit card(s) but have no emergency funds, cannot retire, have no pleasure in your life…well, you get the idea.
What are your thoughts? Please share in the comments below. 🙂