Another pile of mail has made its way to my kitchen counter, and once again I will go through the process of sorting through it all, pitching the “junk mail”, and organizing the “important” mail.  I will never cease to be amazed at how much “junk mail” two old people can receive!  It seems like at least every day in the mail I get one or two credit card offers. One is touting lower interest rates, another has rewards, all trying to entice me to get their card over the others. If you’ve never had a credit card before it can be very overwhelming to try to compare the different offers.  Finding the one that is best for you is always the challenge.

I remember when I got my first credit card and I hate to admit it, but it seems like a lifetime ago.  Back then things were simpler.  I had never even heard of “rewards” being attached to a credit card, I just knew we needed one if we wanted to reserve a hotel room!  But by the time my children were getting their first credit cards, things had really changed.  It seemed like there were hundreds to choose from.  My children all choose theirs for different reasons; one wanted a personalized picture on the card, another wanted rewards, and another was shopping for the best interest rate.

When they got their cards we tried our best to make sure that they understood how to use them…when to use them, the benefits of using them wisely, and the damage using credit cards carelessly can do to your credit score.  When getting a credit card there are some important things you should know before you or your children get one. Here are a few helpful hints to consider:

• Make sure you don’t open too many cards at once.  Every time you open a new one your credit score gets dinged and having too many cards can damage your credit score.  This includes store credit cards also. The stores are really good at enticing you to get their card for extra benefits.  Of course those benefits may not have much value when you find out about the interest rates!
• Carrying a high credit card balance from month-to-month can also hurt your credit score. It’s all about the capacity or amount of available credit you have on your card.  To avoid a negative impact on your credit score, keep balances under 50% of the credit card limit.    It’s also very important to read the fine print on the card. Sometimes carrying a balance from month-to-month can affect your credit or the rewards on the card.
• Make sure to never make a late payment.  Missing even one can really hurt your score.  If you can’t seem to remember to pay the bill, set up auto-pay through your financial institution. Many financial institutions offer online bill pay. It’s a great way to ensure your payment is made on time every month!  Of course you can always write a check, use a postage stamp and make sure you make a trip to the mailbox or post office in time for it to arrive and be posted before the due date, but the older I get, the more I want to simplify my life.  How did I ever keep up with all that check-writing, stamp-purchasing and mail deadlines anyway?  I do love my Afena CU online account – what a timesaver!
• Closing old credit cards.  Make sure that you don’t close the cards you’ve had the longest.  This can actually hurt your score.  I found out the hard way.  I had closed my card to join my husband on his, not realizing that account age has a positive impact on credit scores. 
• If you do have more than one credit card, make sure that you make a purchase on each card at least occasionally, or it can become inactive and may be closed by the company.
• Another thing to remember is to keep track of your credit score.  You can get a free credit report from each of the credit bureaus once every twelve months.  This allows you to review what is on the report to make sure there are no fraudulent accounts, as well as monitor your score and see what impact your credit decisions are having.

If you follow these steps and are careful in your handling of your credit cards, you will find they can be a helpful tool in managing your financial health.  Speaking of health, I need to get back to my mail duty.  My husband has very little sales resistance, so I try to pitch junk mail offers before he has a chance to see the latest new “Super Pill” that will make us “Feel Years Younger” … Oh, if only that pill really existed!