5 Ways to Be Smarter with Your Credit this Year

Blog posted On February 10, 2021

Late fees, overdraft fees, and fraud expenses are easily overlooked credit card costs, and though they may seem miniscule, they tend to add up. Last year, Americans spent a collective $74 billion on these ‘miniscule’ fees – or an average of $577 per household. But now that it’s a new year, it’s time for some new (and improved) credit card tactics. To get you started, here are five ways to improve your credit habits starting now. 

1. Pay your balances in full

About half of all American credit card users already pay their balances in full, but If you’re a part of the many who don’t, you might want to start. Paying incomplete balances is one way you can rack up interest charges fast. The easiest way that you can avoid carrying over monthly balances is by only charging expenses to your credit card that you can pay for in full.  

2. Try using auto pay

Almost all credit card companies offer electronic autopay options that pay your bills automatically. This helps ensure that you will not miss payments – as long as you have money in the account to which the autopay is linked. Setting up autopay is very easy to do and can save you the time of paying your bills manually every month. Plus, it can save you the money you would have potentially spent on late fees and interest charges.

3. Examine your bill statements

Even if you have established autopay for your credit card bills, you still should try to spend some time looking over your bill statements every month. Occasionally, unauthorized or incorrect charges can occur, so reviewing your bills can ensure that all of the charges that you are paying for are correct. The Fair Credit Billing Act of 1974 can protect you from fraudulent charges, but only if you notice and report them.

4. Reevaluate your portfolio

The credit card industry is ever-changing and constantly evolving. Many Americans continue to hold the same credit cards every year – making it more likely that your credit cards are now outdated and uncompetitive. This year consider your other credit card options. A new card could help you get more spending rewards, a lower interest rate, lower fees, and of course, more points, miles and cash back for opening a new account.

5. Explore your card’s mobile app (if it has one)

Most credit card companies have a mobile app that can help you keep better track of your balance, receive discounts or rewards, and monitor your payment information. On many of the apps, you can check your credit score, redeem rewards, and be notified of any recurring charges you might have forgotten about and no longer need.

Though many of these tips might seem like small adjustments, they could end up saving you large amounts of money – money you could use to start saving up for that home you’ve always dreamed of. For more information on smart credit card tips, consult a financial advisor. For more information on the current mortgage rates, or our different mortgage products, talk to us today!

Sources: CNBC, Money.com