How to be smart with your money

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Do you know how to be smart with your money? Do you have an acquaintance that just doesn’t have a clue when it comes to cash? Everybody knows somebody like that.

Despite the figures of credit card debt which are always headline news, the reality is a high proportion of credit card users never pay late or carry a balance, thus using their cards in an astute way without incurring interest charges. By also utilising less than 30% of their available credit they are able to ensure that their credit score is always in the high range, which in turn simplifies other financial transactions by giving access to preferential interest rates and the best cash back credit cards.

Anyone who neglects to ensure their credit score is high is paying more than they need in interest rates and insurance premiums. By simply following the Fico or Vantage score guidelines on maintaining a high credit score, consumers are being smart. Knowing what contributes to a good credit score is key as many mistakenly believe that savings or checking accounts enhance their scores whilst in reality these factors are not taken into consideration.

Using a credit card for all financial transactions can pay good dividends in cash backs and even reap initial statement credits. Debit card usage is on the increase and is an excellent way of making cash transactions for those who may be tempted to overspend on credit.

The biggest increase in card use is in the area of pre-paid debit and credit cards which rarely have any impact on credit scores and are a clever trick to charge card holders to use their own money. Unless utilized for a specific purpose which the card holder feels is worthwhile, such as internet use or accessing foreign currency abroad, pre-paid cards are one of the biggest cons around. Millions have been lured by the universal symbols of credit cards to pay to spend their own money by purchasing these cards and then being charged to use them.

Those who pay for credit card cash advances are paying unnecessary charges and high interest which could be avoided by simply thinking ahead and accessing cash on a debit card. The charges applied when cards are used by ATM’s not linked to ones bank add up over time.

Other personal financial transactions to avoid if you want to be smart with your money are home equity loans which result in more interest being paid long term on mortgages whilst reducing home equity. Those who are smart with money overpay their mortgages to reduce the term and total interest paid.

Saving money is one of the smartest financial decisions to make. No matter what your personal circumstances are it is always wise to pay yourself first by moving funds into a seperate savings account which will build over time. Savings provide a financial cushion for the unexpected and allow purchases to be made without borrowing, which really should be reserved for simply mortgages and education.