This week’s blog post is for everyone that is juggling multiple credit cards and credit card balances. Too many revolving lines of credit can wreak havoc on any budget or financial strategy. When it is easy to “break out the plastic”, even the most steadfast among us will get tempted to make frivolous or unnecessary purchases. When the bills come due, having multiple cards can make it difficult to know what you are paying in interest and what your total outstanding balance is among all of your cards.
That’s why I recommend limiting yourself to one credit card. By using a single card, you focus your revolving credit into a single account that can easily be tracked and monitored. But not every card is equal. If you choose to follow our One Credit Card Rule, it’s important to take the following into account when selecting your card:
- Interest Rates: While the best-case scenario is to fully pay off your card each month, we know that sometimes it isn’t possible. Be sure to select a card with a competitive interest rate just in case you need to carry a balance in the future.
- Fees: Some cards require annual fees. Do your research and read the fine print to see if your preferred card has an annual cost.
- Perks and Benefits: Cards offer different perks and benefits, such as cashback, travel points, or discounts at certain retailers. Finding a card that will benefit you is important, but remember that perks aren’t an excuse to buy, buy, buy.
- Linked Savings: Some cards can link to a separate savings account. Whenever you make a purchase with your card, it will round up your purchase to the nearest dollar and deposit the difference into that savings account. These cards can be used to augment your existing savings strategy.
Wondering what else you can do to take control of your financial life? Financial Game Changer, the latest book from author and financial advisor Lynn McCarty, offers simple, practical tips to help you shrink your financial worries, gain financial confidence, and build lifelong money habits to make you feel more secure with your finances.
You’re already on your way to financial freedom. The next step is to purchase Financial Game Changer, available at any of the following digital stores: