A Holiday, Charge-Card Reminder …
Just a quick reminder…
Don’t get carried with your credit cards when shopping for holiday presents. Remember that one of the keys to a high credit score is to keep a balance that is no higher than 30 percent of the limit.
This means that if you have a $2,000 limit, your balance should not exceed $600.
Ever. Not even for one day. Even if you pay your bill in full each month.
You see, 30 percent of your credit score is based on your outstanding debt. And in large part, your outstanding debt includes something called the “utilization rate,” which is your balance as a percentage of your limit.
Credit bureaus give higher scores to people with low utilization rates, and they give lower scores to people with high utilization rates.
So keeping the right credit card balance is one of the most important things you can do this holiday season to protect your credit score.
For more ideas, be sure to download my free holiday booklet about saving money during the holidays, preventing the retail store scams, and protecting your credit score.
– Philip Tirone