Using Credit Cards the Right Way

Credit cards have a bad reputation, but what if we could leverage them for good in our lives? In today’s video, I will share how credit cards can be used to our advantage and how to avoid common mistakes that make them less scary. The conversation around credit card debt has been stigmatized, which only piles on the shame and guilt of the decisions we make in our financial lives. I want to neutralize that conversation and teach you how to use credit cards positively.

Let me tell you a story about Valerie, a client of mine who had no credit score due to bankruptcy. She needed to get into an apartment with her daughter but couldn’t because of her lack of established credit. For most people in America, having a healthy credit score is one of the fastest ways to move forward and qualify for the things they need. We helped Valerie establish a credit score by using a secured credit card, which was instrumental in leveraging her way to the next level in life and having some freedom and independence that she desperately needed.

Leveraging Credit Cards Positively

I believe that credit cards can be a valuable tool if used correctly. You can use credit cards to your advantage and avoid common mistakes that can make credit cards seem scary, and I’m here to help you.

One of the most significant benefits of credit cards is the rewards and points programs they offer. By selecting cards that align with your spending and priorities, you can earn rewards that can be used for travel, cash back, discounts, and more. For example, travel rewards can be particularly helpful for clients who travel frequently for business or pleasure. Cash back rewards are like free money, and you can use them to reward yourself with something you’ve been wanting or needing.

However, it’s essential to note that rewards and points programs are only beneficial if you pay off your balance in full each month. If you carry a balance on your card and accumulate interest, the points you earn will cancel out, and you won’t be able to use them effectively.

It’s also crucial to avoid common mistakes that can make credit cards seem scary, such as carrying a balance, missing payments, or maxing out your credit limit. By paying off your balance in full each month and making payments on time, you can establish a healthy credit score that can help you achieve your financial goals, such as buying a car or securing a property.

Common Mistakes and Misconceptions

As someone who has coached clients on credit card usage, I have noticed some common mistakes and misconceptions that people have. Here are some of them:

• Carrying a balance on your card while trying to use rewards points can cancel out the benefits of those points. If you are paying interest on your balance, any rewards you earn will essentially be null and void. It’s important to pay off your balance in full before the statement date to avoid accumulating interest.
  
• Thinking that credit card debt is always a bad thing. While it’s true that carrying a high balance can be financially harmful, having some credit card debt can actually be beneficial for your credit score. It’s important to keep your credit utilization ratio below 30% and make timely payments to avoid damaging your credit score.
  
• Believing that having no credit score is better than having a bad credit score. This is a common misconception that can actually hurt you in the long run. Without a credit score, it can be difficult to rent an apartment, get a loan, or even get a job in some cases. It’s important to establish credit and maintain a good credit score to have more financial freedom.
  
• Not understanding the importance of selecting a credit card that aligns with your spending habits and priorities. There are many different types of rewards programs available, such as travel rewards, cash back, and points and discounts. It’s important to choose a card that fits your lifestyle and spending habits to maximize the benefits.
  

By avoiding these common mistakes and misconceptions, you can use credit cards to your advantage and improve your financial situation.

The Stigma of Credit Card Debt

I want to neutralize this conversation and take it down a notch. I want you to know that wherever you are financially, it’s going to be okay, and you can change, fix, move, or shake whatever it is that you want in your financial life. That’s why I’m here to teach you how to use credit cards to your advantage and avoid common mistakes that make credit cards less scary.

Credit card debt is not a horrible thing, and it’s been treated that way for far too long. The judgment conversation around debt has got to end right now. As a money coach and financial expert, I believe that everyone is on their own financial journey, and everybody has their own financial set points.

For most people in America, having a healthy credit score is one of the ways you’re going to get where you want to go faster. It’s one of the fastest ways to be able to move forward and qualify for the things that you want.

I want to share with you a story about one of my clients, Valerie. She came to me with no credit score because she went through bankruptcy, and she never reestablished her credit. She needed to get into an apartment with her daughter, but she couldn’t do that because she had no established credit.

We had her take out a secured credit card, which is a great starting point for establishing credit. Over the course of a few months, she started to establish a credit score that was instrumental for her to be able to leverage her way to the next level in life and have some freedom and independence that she desperately needed.

Conclusion

Credit card debt should not be stigmatized or treated as a horrible thing. It’s a tool that can be leveraged for good in your financial life. By avoiding common mistakes and using credit cards to your advantage, you can establish a healthy credit score and qualify for the things that you want in life. If you’re ready to take the next step in avoiding the stigma around credit card debt, contact me now to get started.