The holidays may have come and gone, but that doesn’t mean you won’t be finding a few surprises on your doorstep in the coming weeks. As the lights come down, the trees are hauled to the curb and the menorahs are packed away until next year, the bills start to arrive.
With a tight economy still affecting millions of Americans’ pockets, cash has become a scare commodity. Still, while our wallets might be a little thinner, giving remains a central element of the season. If you’re like most, credit cards came in quite handy.
But what about managing your credit after your spending splurge? We sat down with Joan Reading, president of the Credit Counseling Center in Doylestown, to help you manage your credit after the holidays in a sagging economy.
Don’t Carry That Weight
No one likes to see a balance on their statement, but let’s face it, we often pay less than we owe or have been told carrying some debt is somehow good. Reading wants to set the record straight. “There’s a misconception about holding a balance on your credit card,” she says. Reading urges people to pay any and all balances off or at least as much you can afford. Carrying a balance only benefits the creditor while your hard-earned money goes toward accumulating interest and not your principal.
Reading maintains that carrying a balance actually hurts your credit score and paying it off or down only helps your credit report. Although she says you do need to show transactions when trying to establish credit, you also need to show you can pay them off. Otherwise, you’re causing more damage by leaving high balances that do little more than accumulate interest.
Get Your 411
As your spending increases, so does the opportunity for errors on your credit report. Reading recommends checking after the holidays and annually, at the very least, to make sure there are no inaccuracies that could prove damaging when it comes time to apply for a loan, credit line or other financial transaction. Unfortunately, credit bureaus are not always correct, and there is room for human error that can cause discrepancies that don’t necessarily belong to you.
Reading suggests obtaining a copy six months prior to applying for any sort of loan. “That will give you enough time to fix it,” she says.
Don’t Just Stay Afloat
The Credit Counseling Center provides a host of other services beyond debt management and advocates financial literacy so people can achieve financial independence. “I’d love people just to come in,” Reading says. “There’s a misconception that you have to visit us only when you’re in trouble.” She encourages people to pay her a visit at other times throughout the year, not only when they’re suffering from a holiday shopping hangover. “Come in just to get organized,” she adds, “even if it’s just to get a budget on paper. We can help you with the things you don’t think about.”
And while Reading and her team are at your service year round, she also recognizes this can be a particularly difficult time of year: “If you find yourself in a pickle come January, please come see us.”
Go Online at www.ccc-credit.com