Life, it often comes with a number of surprises. I hope you are working and fulfilling your passions. That is the only way you can have true fulfillment in life. You want to wake up with true joy for the day. That, whatever you set to accomplish, it is more than rewarding. Just think, whatever you set out to accomplish will change someone’s life. Leave a smile on their face. That is the best reward. You are more than valuable. You have unique gifts and talents; you can do so much for the world. You are valuable to someone, let them see that value. It’s no better feeling than knowing you impacted someone’s day for the better. Let your light shine and set the world ablaze through your passions. We need you! 

 What also comes with life is the big old responsibilities. Which includes bills. We all have them which you shouldn’t take as a negative. As a business professional, I understand the nature of economics. It is all a cycle. Nothing in life is free which isn’t a bad thing.

Businesses are providing products and services for you. They need the capital to keep operating. They need it to pay for supplies, rent/mortgage, mailings and bills that they also occur. Primarily, they need  capital to pay employees and hopefully, hire more employees. A business can’t run without humans. Humans that also have to survive just like yourself. 

I often think of this cycle when I pay my bills. It’s all part of the cycle. Be happy!  Just think, when you’re paying your bills, you are contributing to the global economy. You are keeping businesses afloat and running. Allowing them to produce more superior products and services for you. Kind of cool huh. You’re a silent hero without knowing it. It all teaches you to be a responsible and upstanding person. Good things are sure to come your way. Just giving you some pointers on taking a positive aspect on bills. With more businesses sustaining, more people are employed! The big kisser, the stronger our economy becomes! Providing for more jobs, innovation and better health, a win for us all! 

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With less people employed, crime rate tends to rise, debt becomes uncontrollable and health tends to deteriorate due to stress. Economics is very fascinating and will touch on more about this subject in a separate article. 

Want to draw your attention to an important facet in your life, your credit score. This score is one of the most important indicators in your life. It is a score you want to keep tabs on at all times. As I talk briefly in a couple of previous articles, it is a determining factor for lenders. It is used as a deciding factor in many critical areas in your life. This score can be used to determine if you’re eligible for a student loan, rent, mortgage, auto loan, personal loan, credit card or employment. Yes, you heard correctly, employment. 

Now, I don’t want to scare you. Your credit score isn’t used as a background check in most cases, so breathe! Employers look at your credit score as a basis of trust; especially if you’re applying for a position revolving around managing money (financial management). Also to verify your identity (want to make sure whoever they’re hiring is the correct person) If they notice a low score, that can send off red flags of lack of trust. Also, psychologically it can tell an employer that you’re not financially responsible. Ouch. I know, this isn’t fair. Especially if you run into unforeseen life situations that happen to set you back financially. No one is immune from issues from occurring. It doesn’t matter if you have a billion dollars in the bank or $200, it can all be gone tomorrow! 

Purpose of Banks

Why FICO Score Is Important For Credit Score

Sites To Check Credit Scores For Free!

How To Read Your Credit Score

Don’t Apply Too Much At One Time

Apply For Credit Cards On Credit Score Sites 

The Criteria You Should Know Before Applying 

Unforeseen Expenses Is A Top Reason For Good Credit!

Why You Should Always Have Extra Money In The Bank

Places To Shop For Credit Card

Keep A Consistent High Credit Score

Why We Should Avoid Lower Credit Scores

Don’t Apply For Too Much Credit In Short Period Of Time

Market Achievements On Resume

Your Network Can Land You A Job Quickly 

A Slow Economy Is A Banks Worst Nightmare

Hard Inquires Limit Them 

Look For No Credit Offers Don’t Penalize For Checking Credit Score 

Features Of Credit Card You Should Know

4 Important Factors To Determine Credit Card

Best Reward Pay Before or On Time 

Call Customer Service To Remove The Penalties 

Income Sources For The Win 

Create A Monthly Expense Report 

Get On The Phone And Negotiate A Lower Rate 

With Credit Cards And Debt Have Secondary Income Sources As Backup Emergency

Credit Cards Safer Than Debit

Conclusion

Don’t take this as a negative, especially if they don’t know your situation. Employers are trying to protect themselves. If you happen to be filling this information out on a job application, you can reach out afterwards and explain your situation. Let them know that you’re not financially irresponsible. You can explain that you’re going through an unforeseen issue that has set you back financially. That you don’t have an issue with managing your finances. Explain your financial history. They will definitely appreciate your transparency. They aren’t looking for perfection, they are looking for honesty. They are humans themselves, they understand. They care if you are passionate about the position and the company values. If you have the passion to succeed and move the company forward. This is what employers value the most.

Once again, don’t let your financial situation stress you out. You have a number of sources that are willing to help you overcome. The key is being aware of your financial situation at all times, primarily your credit score. 

Before we continue on credit score, let’s go through a brief introduction on financial institutions or aka banks.

 

Purpose Of Banks

The bank, we all love them right. They are important and the building blocks of humanity. They are the bridge to our economy, both personally and commercially. It is where we deposit our checks, withdraw funds from the ATM machine, set up our checking, savings or money market accounts. The purpose of banks is, well, to circulate money. The money we put in our checking and savings is put to use in our economy. The banks use these funds to loan out in the form of student loans, auto loans, mortgages, personal loans and credit cards.

 As a thank you, you generally get a small percent of interest on your accounts. If you are working with money market accounts (higher risks) you get a higher percentage of interest. Will talk about these factors in a separate article, just want to keep it simple. Banks make money in two ways, with interest and fees. With loans, there is generally interest you have to pay overtime. It can be as small as 5% to almost 35%. It depends on the amount and the risk involved. Also, banks make money from fees. Depending on your bank, they might charge a small fee to maintain your checking or savings account per month or year. 

Also, if you use an ATM machine outside of their network, they might charge a fee. Stay on top of hidden fees. They are generally disclosed in your banking statements. Go over them and assess any fees. If you have any questions, reach out to your financial institution immediately. You don’t want to be stuck on the phone for hours with customer service, trying to figure out where these charges are coming from. I know, these statements are lengthy but please, don’t skim them. Know your financial implications inside out. It will save you a lot of hassle, especially when trying to apply for a loan or credit card. 

You have to remember, banks have to make money as well. Interest and fees are two avenues they depend on. Keep this in mind when you come across them. Now that you have some understanding on the purpose of banks, Let’s segway into the next section, credit score. 

Why FICO Score Is Important For Credit Score

Your credit score is like your lifeline. It determines your worth to lenders (financial institutions/banks). Essentially, your risk profile, how reliable are you on paying your bills and the lenders receiving their money back. We are all assigned a 3-digit number (that can change overtime). When it comes to credit score, we are generally assigned the FICO score the most. There is also the Vantage Credit Score. They are assigned by the pinnacle 3 reporting agencies. Equifax, Experian and TransUnion. 

Sites To Check Credit Scores For Free! 

I personally use Experian! That is how I got my car by using this site. My car dealer checked my score and used reports from Experian. I’ve used this site for years. It’s free. Make sure you don’t opt for paid membership, just select free membership. As we know, these companies must make money. They construct the sites to upsell.

 Make sure you keep current membership and don’t fall for the consistent prompts to pay for membership. Select, keep current membership. All you need to know is your scores. With the free membership, you receive enough information about your credit score. It reports scores across all 3 reporting agencies. You see your score and details. It also outlines your debt and different sources (if you owe). For instance, if you owe a student loan, credit card or have outstanding collections. 

How To Read Your Credit Score 

We are all assigned a 3 digit code. The score ranges from 300 (poor) – 850 (excellent). On Vantage and FICO, they both go up to the same threshold of 850. The lower your credit score,   the more you indicate to your bank you’re a high risk. You’re not either paying on time, paying the minimum balance or paying at all. All big no, no’s. If you’re consistently behind on all, the worst your score drops. 

The higher the score, the more attractive you’re to banks/lenders. You’re paying your bills on time, before the deadline and either the minimum or more than the minimum on time. You’re responsible with your money, I feel confident you will pay us back and on time! This can lower your APR/interest rates, penalties and can even get more rewards! What rewards? A higher credit limit and more attractive card offers. 

So, for our newbies or novelists, how do we read these credit scores? Well, let’s go to examples. The best way to learn!

For instance, if you check your credit score and see a 500 credit rating, this indicates you have a fair score. This means that you will have limited credit offers. Often, offers that range in extending limits from $100-$500, paying a fee and high interest rates. Depending on the institution, they can also reject you, even if you qualify with a fair credit. Why? 

Lenders look at a lot of factors. Often, if they see too many inquiries or applications, it’s a red flag. Either you’re desperate for cash and have no money to pay back asap. Also, you’re being rejected and trying to go to everyone, seeing who will accept. You’re a high risk, a deficit to the lender. 

This brings me to my next point! 

Don’t Apply Too Much At One Time 

When you’re looking for credit, you have to be conservative and smart. Apply to credit opportunities that you won’t be penalized for applying! These are no ding offers. You have to read the fine lines. I don’t want you to get penalized for applying. Why? It takes resources to read your applications. This is a cost to companies. If you’re applying haphazardly and not a prime candidate, you’re wasting the company’s time. They will penalize you by reducing your score. Be smart and read the terms before applying. Look for no ding offers. This leads to the next point. 

Apply For Credit Cards On Credit Score Sites 

Apply for credit cards on credit score sites first. They help vet and narrow the best choices according to your credit.  I know, we receive credit card in the mail and our email all the time. All vying to apply, sign up now!  Not so fast! You want to apply to cards that fit your financial needs, not get you in trouble. Before applying, look for the following criteria. 

The Criteria You Should Know Before Applying 

Your desired credit limit, credit score, APR and best rewards package. You want to evaluate all these factors. Credit score sites take care of the hard work. They often offer you cards according to your credit score profile. This will help prevent you from wasting time. They direct you to apply to cards you have the highest chance of being approved. 

This is especially true if you have a low credit score. You’re at a high risk, therefore you will have limited opportunities. You will have to seek companies who are willing to extend credit to you. Under your credit score sites, you will see a tab for credit cards. They will indicate your probability of approval based on your credit score. Pretty neat huh! 

I use this and it’s a life saver. I look over my chances of approval and only apply to companies I know I will be approved. I only send in one application at a time, no more than that. I don’t want my credit profile to lower by applying to more than one card. I have good credit so it’s no biggie for approval. I go for the ones with the most attractive rewards, great Apr- generally 0%. 

Once again, never apply to a gazillion cards at one time. Try to apply for one credit card at one time. Look for cards with the highest offer and chance of approval. Space out your applications over 3-6 months. 

Now, if you’re in a true bind and need credit asap, you can slide for a bit. It will hurt your score but I won’t say you wouldn’t get approved for more than one card. Even with terrible credit, you can get approved if you apply for more than one card. The key, look for cards that you will be approved for. 

Now, before you think this is Scott’s free, it is not. Your credit will take a hit. It’s something you have to think about. Yes, you need credit fast, you have no other options. Just realize, your credit will take a hit for applying for more than one card in a short duration. Creditors know you’re in a financial bind, not in a position to pay back asap. You’re a risk. You will get ding. Just prepare. 

You can negotiate with creditors so the blow won’t be as bad. See what offers they can extend. The key, we don’t have long periods of bad credit. The longer, the less financial cushion you have. The whole purpose is to stay financially stable. The better the credit, the more opportunities you have.

Unforeseen Expenses Is A Top Reason For Good Credit! 

We all have cars, houses, and other assets. Unforeseen expenses can occur at any moment. Especially if you have a car. 

Why You Should Always Have Extra Money In The Bank

I know I state this example in almost every article but I reiterate for a reason. I want you to survive and not stress about money. Ever. We have cars, they cost money. You can go in for an oil change and end up with a $1,000 bill. I have a number of times. The mechanic, “your brake pads are terrible, your alternator is bad, you need work asap” You have no choice. You don’t want to risk your life or life of others. Plus, the longer you put off work on a car, the worse things can become. It can be a snowball effect, causing problems with other parts of your car. 

This happened to me. I put off changing the oil and ended up blowing my engine. A $60 oil change service end up blowing into a $10,000 engine. You see what I am getting at. 

We have responsibilities and unforeseen expenses. A top reason to have good credit. It’s not the only reason. It states discipline and strength. You’re not haphazard with your money, you understand the value and that is to try to save as much as you can! You never want to depend on the system or someone else. You’re independent and responsible. 

Now, circling back to my point, please, be smart when it comes to credit. Recognize that certain things can wait, what you want to realize it’s never good to be in debt. Yes, some debt is ok. Student debt, great with taxes. At the same time,  you don’t want to be indebted to someone. It’s not fun. It prevents you from enjoying life. 

Are you working to pay someone back or to enjoy life? Can you save up for a nice vacation or paying back all the creditors? Life is short, you have to realize that every minute should be spent wisely! Plan, conserve and think about what I can get on sale. What deals can I get? Should I wait until the holidays (when I know this item will be on sale). Can I wait for the next attractive coupon/offer? 

Places To Shop For Credit Card 

Credit Score Sites 

When you go on the credit score sites, they will state if you’re pre-approved for cards. Cards you won’t get ding for. They will offer the limit, rate,the full terms and agreements. 

Credit Card Provider Sites 

You can also go to credit card providers’ sites. Discover, MasterCard, Visa and American Express. They have different options. Just like the credit scores sites, they have cards that fit  your credit profile. For instance, if you’re a student or have bad credit, you can see a list of options. 

Provided below are links to the providers!  Before you click a disclaimer. Look for the credit type options. Select according to your credit profile. If you don’t know your credit score, check out the credit sites I previously recommended. I will list them here. Credit Karma , Experian, Equifax, or Transunion.  

Find a Credit Card – Mastercard 

Apply for a Credit Card – Visa Credit Card | Visa 

Credit Cards – Compare & Apply Online – American Express 

Get Pre-Approved for a Discover Credit Card | Capital One 

Keep A Consistent High Credit Score  

The higher your score, the better your credit. The more valuable and reliable you’re to lenders. A higher credit score indicates financial responsibility, less of risk and more opportunities to borrow. You will also receive more offers. Have a quicker approval process. You will be able to borrow more often. 

For instance, many merchants offer the feature, buy now pay later. This can give you some breathing room if you want to limit the money flowing out now. You can pay in installments. It can be 2, 4, 8 or 12. 

Even if you’re a person who doesn’t rely or like credit cards, you need credit. You need credit history. If you’re trying to obtain rent, the landlord would like to know a report. They are investing their property. They have bills and taxes. They rely on your rent to cover. If they know you’re history, it gives them the go. A negative, they will look for someone else who is financially responsible. Also, certain jobs or bills, they need to know if you’re financially responsible before turning on the lights. If you’re applying for financial jobs, this is a biggie. They wouldn’t want anyone who isn’t financially responsible. It’s a risk! Why would I trust you around our money? They don’t want anyone who will be susceptible to stealing. Let alone, mismanaging the company’s money! 

Why We Should Avoid Lower Credit Scores

A lower credit score indicates the opposite. That you’re unstable and a risk. This can cause lenders to reject your applications or raise your APR/interest rates. Also, you may have to pay fees (upfront) to use a credit card. Also, your opportunities for loans are severely limited. 

Now, we will go back over the banks. Banks have to make money. How, off  interest and fees. Banks know they can make some mucho dinero off some of our lower credit friends. Higher APR and fees to open up a card, cha ching! Yes, it is a risk but banks are smart, they incorporate lower borrowing limits. Also, charge high interest rates and fees to open up a card. I think it’s rare if none of the 3 are incorporated. You may think, are we acting like creditors? No. They are acting like a business. If they can make money, they are there. Yes, they have to protect themselves but at the same time, have to make money. This is where this cycle comes in. 

Don’t Apply For Too Much Credit In Short Period Of Time

I get it, the economy is tough right now. If you are laid off and facing a tough time finding your next job, things can get a little hectic. Especially when there are millions in the same boat. All clamoring after a job at the same time. Talk about competition.  Hey, you have to survive. That involves paying bills. We all have to keep the lights on, food in our tummies and gas in our vehicles. Let alone, the basic necessities in life. 

Market Achievements On Resume

Don’t worry and don’t panic! Make sure you have a glowing resume that highlights all your accomplishments, education and skills. Have your resume tailored to the position you’re applying for. It should match what is displayed in the job description. Send a cover letter to every job you submit. Tailor your cover letter to the position, highlight your achievements and why you stand out. Show your excitement for the company and position.  Demonstrate you are the one that fits their company’s culture. I highly recommend researching the company, check out their core values. In your cover letter, tell them how you will move their company forward.

Your Network Can Land You A Job Quickly 

You can also check in with your network to see if there are any jobs available. Also, take advantage of your career counselors and resources with your schools. Maximize all resources available and stay persistent! Your hard work will pay off and your next job will come through! Stay positive at all times. Build confidence and know that you are valuable, you will make an impact with the next opportunity. Keep optimistic, you will get through this! 

As I highlighted, this can be a tough time if you are unemployed or underemployed. Primarily when you have a slew of bills coming in, you don’t want things shut off. You may think, it may be time to downsize or perhaps, it’s time to sell our precious materials for survival. If this isn’t an option, the temptation may be to inquire about credit and loans. The key is not to have too many inquiries in a short period of time, it raises a red flag. Lenders are smart, they understand all factors. 

A Slow Economy Is A Banks Worst Nightmare

A slow economy will more than likely signal more inquiries than normal. Also, people may be out of work, therefore raising the alarm again. It will be harder for them to pay the money back, let alone, on time. Also, lenders conduct a credit check (to see if  you’re eligible for credit). The worse your credit, the harder it will be to receive credit. Why? It tells lenders that you have a tough time paying your bills. This may prompt the lender to deny your application.This may prompt you to go to the next lender for approval. 

If you keep doing the same process and getting denied, this builds up on your credit history (negatively). If the first and second denied your application, what do you think will happen when you go to the third one. The banks all go through the same investigation process. 

Once again, lenders are smart. If you have too many inquiries, it signals that you are in desperate need of money. Probably money you can’t repay quickly and on time. They realize if you are financially stable, you wouldn’t be submitting too many inquiries. Let alone, any at all. 

Hard Inquires Limit Them 

What you want to look out for is hard inquiries. This is when lenders look at your credit score to determine if you’re eligible for credit. Primarily,  when you are looking to process your application (not shopping around). This can lower your credit, which is what you don’t want. Why?

 Your’e asking to borrow money. This may signal you’re financially unstable. The good news, it’s temporary. If you pay your bills before or on time, you won’t be penalized. This will actually help you to improve your scores. With time ((within a few months) you will see your scores improve (overcoming the slight reduction from the initial inquiry).

 The key, make sure you pay your bills before and on time to keep your credit in superior standing! You want to keep lenders happy and your options open (especially if you run into a financial crunch again)! 

Look For No Credit Offers Don’t Penalize For Checking Credit Score 

My recommendations, look for credit cards or loans who don’t penalize. More than likely, cards that you’re pre-approved for. Before you toss out those offers in the mail, take a look at them. Especially if they have the big ole Pre-approved on them. Look for the fine writing (applying won’t affect your credit score, if not approved). 

Experian is an amazing service to start with. They offer credit cards tailored to your credit score. The best part, they offer no ding decline (meaning your credit score won’t be affected if not approved). How to find them? Under your account (under credit cards). Experian will list available credit card offers. They also go further to see if you have a bad or excellent chance of approval. Doing all the hard work for you! 

If you’re shopping around, look for cards with this fine writing. I will repeat (applying won’t affect your credit score, if not approved). It will only be affected upon approval. Aim for cards with the best chance of approval (so you don’t build up to many inquiries). On Experian, look for cards where it states excellent chance for approval). 

Which will lead to my next point, how to select the right credit card.

Features Of Credit Card You Should Know 

Besides the cool designs and features, you want to know the fine details of your credit card. Let’s get into them shall we! 

4 Important Factors To Determine Credit Card 

When choosing a credit card, please consider these 4 important factors. Credit limit, APR, payment due date, and billing cycle. 

1. Credit Limit

This is a biggie which is often overlooked. Usually, you’re just happy if you have a credit card. Especially when you have to make a nifty online purchase without reaching for your debit. You know the rules of a credit card. Never max out and make sure you pay off your balance (don’t want to incur big old interest). 

Before shopping for a card, you want to have a plan. You need to know how much you need to borrow. Is it a small or large amount? This will determine your credit limit. Your credit limit is the maximum amount you can borrow on your card.

 For example, you just got married and looking to update your new kitchen. You want a new microwave and dish set. If you have a credit card with a $2,000 credit limit, the $2,000 is the maximum amount you can use. You will have to factor this in your budget when planning for the new microwave and dish set. 

If it’s a large amount, you’re going to need a large credit limit. It gives you breathing room to pay for your lease or mortgage. It also comes at a cost. Lenders are weary. They have a business to run. They don’t want to shell out a lot of money all at one time. They would rather shell out cards with a $500 limit than cards with a $20,000 limit. It’s a risk no matter how financially sound you are. They are still looking at the fact you have to borrow. Hey, you don’t have enough funds to pay for this purchase at this moment. If you lose your job or dwindle your savings, what’s next? You’re not paying your credit,therefore, they are losing money. They have to account for this. Also, they know you will be more susceptible to being irresponsible. Let’s go to an example, lottery winners. 

The Lotto Of Failed Dreams 

Yes, after getting off work and turning on the evening news, we all saw the segments. So and so just won the big million dollar jackpot. You also see the following shows on E!, how they blew it all.

These winners didn’t come in with economics or business degrees.  They failed to remember money. Especially, if you’re irresponsible. They blew it on big purchases, extravagant living, and impressing family/friends. They spent more than they saved. 

They also didn’t account for taxes. Yes, the taxes they owed the government. They came in financially illiterate. Sharks ate them up. Lawyers also scooped them up for dinner. The mortgages, car and property taxes, they didn’t plan. I have enough to buy a nice house. They failed to note the recurring expenses they would have each year. Taxes (property/sewer) my friend! The take home was less than the spend. They ended up worse than they were before. 

I feel bad for these winners. It was the same story with them all. Some of them quit their jobs. They failed to note the future. No plans at all. Have no ongoing money flowing in. What happens in retirement years? Do you have retirement/pension? No.  It was a first time having a house.The same with having a lavish car. They had no clue all that was involved. 

 Now that we got a little financial literacy lesson out of the way. Get back to our credit features. Let’s stop the brakes for an important message. 

What Determines Your Credit Limit 

Your credit limit is based upon a number of factors. Lenders factor economic climate, your income, credit history, debt to income ratio, and goals. I have to reiterate this again, lenders are looking for those who are financially stable.

Even if you have perfect credit, before applying, you have to be careful. Especially applying for a higher credit limit. Let’s face it, we all don’t have substantial savings or loans available at our disposable. We may have a large purchase (car or home) we are eyeing. Something you need right now. 

We need transportation to survive. We all don’t have the privilege of working at home. Let alone, a place of employment within walking distance. How can we travel to work, grocery store or to an event? This is daunting if public transportation or ride shares are scarce in your area. For some of us, we need a car in our area. For some, your job requires transportation. I can testify. I have to set up a display. Often, it is at different fairs, events and stores.  I can’t hop on a bus with over 70 pounds of equipment. Not going to work. 

2) APR Know The Terms

Next, know the terms of the APR. APR is the annual rate you have to pay when you don’t pay the full balance. For instance, a credit card with a 3% APR. You carry a $200 balance. The bank will charge you $6 on top of your $200 balance. Why? Banks have to make money. They are a commercial institution just like the rest. How can they make mula, through interest and fees! Money is made through these avenues. They aren’t made to just manage your money. Banks have overhead costs. They have to pay employees, keep the lights on. 

When you don’t pay on time, they have to rely on going into cash reserves. This limits the funds they can extend to others. They have to penalize, if not, there would be no incentive to pay on time. Also, it covers their costs of not receiving payments on time. They have monthly bills they have to pay just like you. It’s a circle effect.

Some companies offer 0% upfront and then after a duration may increase to a certain percentage. For instance, you’re extended 0% for a year then after, it increases to 3%. You should know and plan your budget around this factor. 

Usually, our good credit friends are introduced to this rate. The worse your credit, the higher the APR. Why? Risk! Lenders know you are a high risk based on your previous history. You will receive a lower credit limit and higher APR. Sometimes, you have to pay upfront a fee for a card or have to put money on a card (when you have bad credit). 

Why it’s important to know your credit score and to maintain a great score. The better score, the more rewards you have. 

If you have an emergency situation where you need physical cash (laundry or emission test), you’re charged a higher APR rate when you opt to withdraw cash. It’s a cost to withdraw cash for banks, they pass that on to you. Know the terms if it comes to this! 

3) Due Date

Yes, yes, we are all responsible adults. It doesn’t mean that we can’t use a little nudge and reminders. Write down your due date, set alerts a week before payments are due. Make sure you have sufficient income coming in to cover your payments. 

4) Billing Cycle

Know your billing cycle (usually 30 days). Are your payments usually due at the beginning of the month or 3rd week of the month? Get a sense of your cycle. We want to avoid late payments. With late fees, pesky fees are bound to add up. You also don’t want to end up with them terminating your card. That is a big nose dive to your credit score. Lower credit limits your ability to borrow. That’s a big no! 

Best Reward Pay Before or On Time 

Know your cycle, keep up to date, make sure you pay before the due date. They often reward when you pay before and on time! How, through your credit score! Your score goes up every time you pay, it shows financial responsibility and you’re not a big risk! Yes, I would like to lend to you, you know how to pay and on time! The better your score, the more freedom you have. Remember, having a bad score can prevent getting a job, scoring an apartment, or borrowing even further. 

Call Customer Service To Remove The Penalties 

Separate from all of this is penalty fees. This comes when you miss payment(s) or don’t comply with the terms of the card. Say for instance, you don’t pay your credit card for 3 months. This is very alarming to the credit card company. Never leave them in the dark. 

Give customer service a call, let them know your situation. Let them know you’re having a tough time paying your card on time.  I don’t know your situation but you should be upfront. Especially if it isn’t your fault. 

Did you lose your job? Did a family emergency happen? Did your brakes go and have no way to pay the mechanic? Did you have an unexpected loss in the family? Let the credit card company  know! Ask them if they can extend a grace period (so you won’t be penalized). See if they can remove the penalty fee. Be upfront and save some money! 

Income Sources For The Win 

The next factor is your income sources and ability to pay. Do you have twice or more of the amount of income coming in to cover the payments. For instance, you have a credit card with a $900 limit. You plan on using the whole limit over 3 months on furniture purchases. You factor in your savings ($5,000) and you make $3,000 a month. 

Create A Monthly Expense Report 

To go a little further, you can create an expense report. With or without a credit card, creating a monthly expense report should be part of your arsenal. This helps create discipline and keeps you financially sound. Don’t just wing it, that’s how you get in trouble. We are human. You can be out and about, see the latest iPad on sale and next thing, it’s in your cart. You’re not tracking. 

Little do you know, you can have unforeseen expenses come up. Car troubles, you have to have money to pay. Can’t drive with bad brakes or no engine! We have to be smart and track our income (money flowing in) and expenses (money flowing out). 

When adding a credit card (money flowing out), we have to be smart. Why, credit cards come with interest, which can add up to additional money flowing out if you don’t pay on time. This money could be apply to utilities or food, money you can use for survival. 

You can account for your utilities, mortgage/rent, food, gas, phone, car insurance, loans, miscellaneous expenses and upcoming credit card expenses. Figure out how much your expenses will add up. 

For instance, you plan on spending around $300 on your credit card per month. Add this up to your monthly expenses. Does your income override your expenses? If so, give yourself a pat! Are you on the cusp, then you want to slow down. See what you can eliminate or reduce. If your expenses are overriding your income, then you will have to think about sacrificing something. Either put off purchases until you can build up your savings. 

Yes, I know you’re relying on the credit card to help cover. The key, making sure you can pay for the credit card over the duration. If you don’t have enough money flowing in to cover, you’re going to end up paying interest or even worse, end up in debt. Debt equals, creditors closing up their pockets and forgoing to lend you money. You don’t want to ever end up in the red. It can take years for your record to clear. 

This is the whole goal. Figure out why you want to opt for a credit card. If it’s for emergency expenses, I totally understand. Still, you want to factor in the consequences. I already provided an article for secondary income sources that can help you pay off your debt quicker. The quicker you pay, the more financially secure you will be. The whole goal is to survive, not be stressed by debt! 

Get On The Phone And Negotiate A Lower Rate 

Can you negotiate a lower rate for your bills? I do this all the time. I am always on the phone. Longstanding customers, pay bills on time faithfully, what is the best rate you can offer. I don’t want to go to the competition, which have been sending me a lot of attractive offers. I want to remain, how can you lower my bill? Do this faithfully (every 6 months to a year).  

I save my grandmother and myself thousands of dollars per year. Why am I so adamant on lowering bills, my previous job. It was part of my responsibility to be a master negotiator. I negotiated lower speaking fees and rates. That was my thing. Also, increase sponsorship dollars. Plus, having an MBA, I am trained to run a company. Negotiation is a peak skill. Lower the bills, save the company money. How can we cut expenses? It’s a thing. 

With Credit Cards And Debt Have Secondary Income Sources As Backup Emergency

What you also want to factor in is emergency situations. When you plan on using a credit card, you want to plan ahead. Especially to avoid credit card debt! Say for instance, you lose your job. Do you have secondary income sources? Investments, savings, second jobs or gig economy work? Here is an article I highly recommend you bookmark and read. In this economy, it is wise to have secondary income sources. No matter if you’re a nurse, lawyer or fast food worker, have a backup source! 

Credit Cards Safer Than Debit

Also, in some cases, credit cards are safer. We all have to worry about cyber crimes. We all have our cards stored on sites. Yes, they all have great security protocols. Sometimes, things fail. If hackers happen to get your card information, you can protect yourself. It is easier with a credit card. You can cancel the card and get a new one. No money is taking out your bank account. With debit, money was taken out. It may take some time to get your money back. Which sucks. Banks have to investigate and that takes about 3-5 days. 

Once they approve its fraud, it  may take another 2-3 days to get money back into your account. We are talking 1-2 weeks here. Plus, you may have to change all your bank account information and get a new debit card. That takes time and card/checks being mailed. Then, you have to change all your information on the places you have your bank details stored. It can be for bills or shopping (auto payment). 

Conclusion

Money comes and goes. We all need it to survive. How can we eat, live and travel? We all spend most of our lives in employment. We go through 12 years of primary education. Then 2-6 years in secondary education. Then 10-50 years in employment. For some, we live at our jobs. That’s all we know. We spend over what, 8 hours a day. When you’re in management, it can be up to 12 hours. 

I know this! When planning big conferences and working alone, it’s grueling. I am on the phone, I am writing letters, coordinating speakers, helping attendees, drafting the promotional materials, handling the payments. If something goes wrong, I have to spend the time fixing it. Everyone is relying on me. I received so many emails, I never want to see a computer again! 

I want you to come away more financially literate. I have an MBA and a bachelor’s in marketing. Plus, I am advanced in math. I know about financial literacy. I have done so much research and papers on these topics. You can’t pass without being literate. No one wants to hire someone who can’t generate the corporation money. 

I am trained to run a corporation. I have done many papers on a mock corporation, all receiving an A. I don’t play! I love business. My dad had a business degree. Highly advanced in math and worked for the government in Africa. It’s in the blood. 

Where should we expand, overseas or stay domestic. Should we build more manufacturing plants? Will we recoup this investment? Is there a need for our product? Can’t let the investors down. Without their money, there is no corporation period! This is how corporations started. With investors. Either from loans from banks or investors. We need it to buy the materials, market and pay overhead. 

I type all of this from my personal experience. I don’t want you to be in a financial crunch. I can’t stress how important it is to maintain good credit. Yes, life situations come but one thing, try not to ruin your credit. Try to get out of the crunch asap! 

Having bad credit, that can stay on your record for years! I never want you to be without a safety net. That is detrimental to be rejected! Especially if an emergency comes up. If you’re family or friends are strapped, who can you run to! 

Lenders aren’t going to want to lend to you, no matter your story. They have to protect themselves. I don’t want you to end up homeless or losing your life! That is detrimental. 

Why I draft this article. Good credit is just as important as your spirituality, income and health. 

Understanding the terms a little bit more would help. For many, they don’t understand. All they know is a number. They aren’t checking their score faithfully. Also, they may be running into a financial bind. That is ok, I will catch up on the bills later. 

Never be passive. You never know if something else happens and expenses start to really add up. The expenses are outweighing the income. You start to stress. Things get tighter and tighter. Your score drops. This isn’t good. Once again, it’s staying on the record for years that hurts. Even if you pay off the debt, still, that blemish hurts. You are going to have to rely on either borrowing from family/friends or finding extra income. Lenders aren’t going to want to extend any credit. 

Safety net is the best. Keep on top of your expenses and income. Investments, retirement, tips, trust and inheritance. I already mentioned sources to get extra income. Please view those articles. As an experiment, I decided to do extra shift work. I made $2,300 in extra income in one month. This will be applied to emergency expenses. 

I have to practice what I type. Plus, I grew up with the teachings of being financially responsible. Through my grandmother and college. I want to keep my record of having outstanding credit. Just like my grandmother, she never was in debt. Ever. She never like to touch a credit card. She had a lot of money but never shopped like she did. She was as frugal as you can get. She was smart! She was also generous. She used her money to help others than herself! I am one of the receivers. She helped me with school and purchased my first car as a college graduation gift! 

Here’s to being more financial literate in 2026! Look out for more articles that will provide more tips to increase your wealth! 

How do you feel about your credit score? Do you feel you can improve your credit history? Are you in credit history jam? Sound off in the comments below!