While knowing the sep ira rules may help to decide your best personal saving strategy, but I guess in order to be able to save, you need to free up as much money as you can. By the time you receive your paycheck and pay the necessary monthly bills, you may not have much left at that point, so it’s important to not only track where every dollar is going, but if can you improve upon what you are spending. A good way to start looking at expenses is to take a look at last month’s credit or debit card statement and go line by line to see where your money is going, and improving your credit score can help reduce those monthly expenses.
Late Payments Not Only Ruin Your Score
Payment history is one of the largest components of your credit score and when you become thirty days late is when it will be reported to credit, but that’s not the only ding you will get by being late. If you are even a day late, while it won’t get reported to credit prior to thirty days, you will still get charged a late fee, and maybe more. You could be at risk of an interest rate spike that would continue to cost you money every month that you carry a balance going forward.
A family member used to always say, “everything is negotiable”. While sure that is true when you look to buy a car, a house, maybe not so much in retail as much with set prices, but that doesn’t mean you can’t also negotiate your rate with your credit card. Much like threatening to call and cancel your cable bill if they don’t lower the ridiculous rate, you can do the same with your creditor. While you may not get 0% like you want, but you could meet somewhere in the middle. Especially when it comes to rewards, why bother staying if you don’t have those.
Look for the Best Rewards Card
Speaking of rewards, that actually is a great reason to use a credit card for every purchase you make. By charging the normal purchases you would make anyways in a given month you can earn cashback rewards in the form of points you can redeem for gift cards, hotel rooms, or airline miles, or even better, dollars back to you. Just be careful that when you start to see the rewards adding up that you don’t go on a charging spree just to get the rewards, otherwise, if you can’t pay back the full balance and you start getting charged interest, you are no longer saving with the rewards.
Take Advantage of a Balance Transfer
If you do find yourself carrying a balance over month after month, paying high-interest and not reducing the balance at all, it may be time for a balance transfer so you can take advantage of a lower interest rate over a set period, preferably 0%, so you can pay off the debt during that time. Just pay attention to any transfer fees, as they could be 3-5% of the balance you are transferring, which may seem like a lot at first, but think about that up-front cost but then having no interest and really being able to pay down that balance much quicker than you could at the previous rate.
Keep an Eye Out of Promos Ending
While that will be great to have a low interest rate, if you are not dividing the total balance over the amount of months you have in the promo rate, any payment lower than that will still give you a balance at the end of the promo rate, at which the remaining balance would be hit at a likely sky-high rate, so hopefully at that point it’s down pretty low, otherwise you may need another transfer.
Making the Minimum Payment Won’t Help the Balance
Each month when you get your credit card statement it will list a minimum payment. This will be the minimum required to keep your account in good standing for the month, but it will do little to your balance, as it will probably just cover interest and a few dollars into the principal balance. Paying the minimum could keep you in debt for decades, so it’s a good idea to pay as much as you can afford each month until the balance is finally gone, otherwise you could be seemingly stuck with that debt on your shoulders for a long, long time.