[Musing] New Year’s Credit Card Resolutions

As we start another year, now is the time many people reflect on how to improve different areas of their life. Don’t forget to take a look at your current credit card situation! Below are a few things you may want to consider when making your resolutions:


  1. Credit Card Interest: I always adamantly discourage paying any type of credit card interest, but life happens and unpaid balances may occur. This is a great time to assess your current credit card balance situation. Have you not been paying your balances in full? What kind of interest have you been paying each month? Although paying credit card interest pretty much erases any type of cashback and other credit card rewards, do not be discouraged. Take a step back and instead of focusing on increasing the cash back potential in your credit portfolio, start making a strategy to tackle your credit card balances instead. The goal is to pay off your credit card balances as quickly as possible starting with the highest interest ones first. Depending on your credit score, there are various options to mitigate credit card interest. Opening a new credit card with an introductory rate of 0% interest to transfer credit card balances can be useful. However, be wary of balance transfer fees and interest that accrues after the introductory rate expires.


  1. Credit Portfolio Cash Back Potential: The beginning of each year is also a great way to look at how optimized your current credit portfolio is for how you spend. Take a look at all your credit cards and see if they are still meeting your needs and maxing your cash back and other rewards. Life is always changing, therefore your credit portfolio should as well. Perhaps going into this new year you are no longer traveling as much or maybe you are now spending more on gas or groceries than before. Take advantage of this financial self-reflection to adjust your credit portfolio to ensure the upcoming year is filled with the highest possible cash back opportunities.


  1. Overall Strategy and Goals: Take a look to see what your goals are for all aspects of your life. Depending on what they are, they may affect certain aspects of your credit portfolio. For example, if you are planning buying a house or planning a big vacation, these will all affect the way you should be utilizing and adjusting your credit portfolio. When leading up to getting a mortgage you may want to consider not opening or closing any credit card accounts. Or if you are planning a big vacation it may be a good idea to look at new credit cards that will help pay for the airfare or maybe the hotel costs.


Make your credit cards a part of this year’s set of resolutions. No matter what your goals are, credit cards along with your other personal finances can play a key role. Good luck and keep an eye out for more content from Credit Card Nirvana this year!


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