The urge and desire to spread cheer and shower love, affection, and gifts at this time of year seem to increase with every passing day during this season of spending. The holiday spirit compels many of us to spend more than we can reasonably afford. However, it is said that with consistency new habits can be established and old habits can be broken within twenty one days. At this rate, if you start today, you will be on your way to a new and more financially fit lifestyle in just a few short weeks.
If you haven't taken the time to read the 21 Day LuxuriousCREDIT Challenge take a few moments to stop now and do so. You will thank yourself! If you're not ready to commit to the full twenty one days right away why not take one aspect of the challenge and ease into it? Focusing on credit cards is a great place to park for now. The 21 Day LuxuriousCREDIT challenge talks about the fact that with a few exceptions, the primary reason to use credit is to make purchases that you can not currently afford. Here, we will discuss those exceptions.
Yes, there are a few ways to use credit cards that can actually be helpful to you and promote LuxuriousCREDIT. The trick is being knowledgeable and intentional about the use of your credit cards, and any other form of credit for that matter. Using your credit cards strategically will draw the right type of attention to you as a consumer and show potential creditors that you are credit worthy, know how to manage the responsibility and freedom of having available credit, and you will not pose a potential risk to them or their bottom line.
Buy What You Need, Not Everything You Want
Self control is one of the simplest but most difficult aspects of nurturing LuxuriousCREDIT. While it is possible and even feasible to plan, budget, and calculate what you can and can not afford, if your actual spending habits don't reflect those plans, budgets, and calculations you will quickly find yourself in hot water. One practice that requires consistent use of discipline is buying what you need and saying "No" to some of the things you want. Without self control and discipline the lines of needs vs. wants quickly become blurred. As a guide it is helpful to think of needs as those things that are required to sustain life such as food, clothing, and shelter. You may also want to consider the cost of transportation to and from work and childcare needs as they contribute directly to your livelihood. If you are truly interested in having LuxuriousCREDIT, you must be honest with yourself. You are the one who will benefit!
Stay Within 30% Of Your Credit Limit
The lion's share of your credit score is based on your debt to income ratio. In order to establish and maintain LuxuriousCREDIT, you always want to try to keep your credit card balances within 30% of your credit limit or below. In other words, DO NOT max our your credit cards! When you begin to approach your credit limit, you begin to appear desperate to lenders and creditors. You also give the appearance that you can not afford to manage your living expenses without leaning on credit. This is not attractive to lenders. Also, the higher the balance, the more difficult is becomes to repay it. If you simply can not avoid using your credit cards, keep this fact in mind.
Pay On Time
Outside of your debt to income ratio, late payments are another huge factor credit bureaus use to determine your credit score. Having LuxuriousCREDIT means making your payments on time...every time. If you're using your credit strategically and responsibly, this will not be a problem as you will have budgeted and planned in advance how much you will pay and when. However, if, for some reason, you find yourself in a predicament and don't think you will be able to make your payment on time contact your credit card company right away! If late payments are the exception for you and you have an otherwise good payment history, your credit card company may be willing to work with you on the late payment and it may be possible to avoid the adverse impact that late payments typically have on your credit score.
Negotiate A Lower Interest Rate
If you're receiving solicitations in the mail for lower interest rates than what you are currently paying, you have leverage! Use those solicitations as a litmus to the current state of your credit and your eligibility. Don't hesitate to contact your current credit card companies and request a lower interest rate. The worst they can do is say no and in that case you have lost nothing. Ultimately, you want to pay the least amount of interest possible. If you find that you are receiving repeated offers for lower interest rates, you may find that your current credit card companies may be willing to decrease your interest rates to retain your business.