While we all know that a healthy credit score can make all the difference in our financial lives -- from obtaining low interest rates to securing a personal loan -- most of us don't think about key components that contribute to that score, or how we should be changing those components to provide the greatest benefit to us.
Credit cards are one of the most valuable tools we can use to develop a lengthy, positive credit history. Experts at Desert Schools Federal Credit Union say that while a positive financial history is key, the length of the relationship with your credit card company could mean you're not getting all of the benefits available to you.
According to a recent article from CNBC.com, about 25 million consumers in the United States have had the same primary credit card for at least 10 years, and 20 million have never changed cards. According to a December 2015 study by CreditCards.com, the average U.S. cardholder carries a balance of $5,232, and that number has remained steady over the last several years. Because of these loyalties, or perhaps the convenience that having a steady card in our wallet can afford us, competition for your business among credit card companies is fierce, and the offers abound. From significant sign up bonuses to no-interest incentives, lenders are vying for your business. Consider these points to save money on a current balance and reap the rewards in the process:
1. Research your options: Websites like NerdWallet.com and CreditKarma.com compile the data and research necessary to find the card that fits your needs and ultimately has the most positive impact on your bottom line.
2. Don't be afraid to save money: Many consumers say they won’t open a new card because their credit could take a hit; however, if you keep the old account open once the balance is transferred, this can help to offset any potential lowering of your score. If the old card has an annual fee, make sure to close the account before the fee is assessed again.
3. Pick the card that is best for you: Choose your new card carefully, and unless you're denied, don't apply for more than one in order to avoid damage to your credit rating.
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