Make a new year resolution for your credit health in 2018

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    New Year's resolutions for credit card health in 2017Your mental and physical health usually top New Year's resolutions lists each year, but let's not forget how important your credit card health is, too. After all, if your credit card health dwindles, the debt disease could set in and that could wreck your overall credit health. And that credit health, well, if it suffers your mental and physical health could also suffer.

    According to Melanie Lockert, founder and author of Dear Debt, "…The stress of being in debt and having to pay it back can be so pervasive. When I was paying off my student loans, I felt like I was constantly in a low-grade stress level because I knew my money was never truly mine.

    "There can be so much shame and guilt associated with debt," Lockert added. "You feel bad for getting into debt, frustrated trying to get out of debt and it can feel like you have no one to talk to about it."

    Credit card debt is remarkably easy to get into and notoriously difficult to escape. But if you're in debt, particularly credit card debt, there are steps you can take on the road to recovery. If you've avoided credit card debt so far, that's great, but there are still resolutions you can make for your long-term credit health and to ensure your credit cards are functioning as the tools they were meant to be.

    What's the saying: An ounce of prevention is worth a pound of cure? Take a look at these New Year's resolution ideas to make for your credit health - whether recovering from debt, learning new best practices for your credit cards or just maximizing your credit card perks in the new year.

    1. Stop paying credit card interest

    If you're routinely putting more on your credit card than you can afford to pay off monthly, you're only hurting yourself. So, first things first, create a budget and stick to it. Your wallet will thank you.

    All that said, we know stuff happens; perhaps you have a budget now, but you ran up some serious credit card debt before and you're still trying to dig out from underneath it. In that case, focus on balance transfer cards to pay off accrued debt.

    >CALCULATOR: See how much you could save with a 0 percent APR balance transfer offer

    Nearly every credit score level has options - even those with poor credit! If your credit is Excellent/Good, consider Chase Slate®, which offers 0 percent interest on purchases and transfers for 15 months (and no balance transfer fee for transfers made in the first 60 days, then $5 or 5 percent, whichever is greater). There's also Citi Simplicity® Card - No Late Fees Ever (Citi is a CardRatings advertiser), which has the same 0 percent balance transfer interest, but for 18 months - yes, that's a year-and-a-half to catch up without paying interest. Even those with Bad credit scores can get a secured card with an introductory balance transfer interest rate for 6 months with the UNITY® Visa Secured Credit Card - The Comeback Card™. At 9.95% it's not the 0 percent that those with better credit can get, but it is less than half the standard interest rate, which will help you get you on your feet faster.

    Another way to make a difference in the new year is by being proactive. If you know you're going to make a large purchase, find a 0 percent introductory deal. Numerous credit cards offer 0 interest introductory periods on purchases. Try the Wells Fargo Cash Wise Visa® Card, which offers a 0 percent APR on purchases for 12 months and no annual fee (then, 14.24%-26.24% (Variable)). This gives you a little room to pay off that large purchase over time without penalty.

    Still, remember that even if a new credit card isn't an option for you, there are always the traditional ways to avoid interest: Commit to always paying off your balance and/or living within your means.

    2. Protect your identity

    All but gone are the days of paper travelers checks and cash when traveling. Many savvy adventurers now use credit cards; in the unfortunate event that you lose them, your hard-earned travel fund isn't lost forever like it is if cash goes missing. Still, be forewarned: Credit cards alone will not keep your money - or identity - safe.

    Make sure you're smart about choosing a reputable bank's ATM and that you track your spending as you go so you're aware of any fraud immediately. Let your banks know when you're traveling and where, so they don't decline charges for possible fraud. Thinking of using the hotel's computer to print your boarding pass? Don't forget to clear your history so it's not available to others when you're done. Store belongings in your hotel room safe. The list of ways to protect yourself goes on and on. Bottom line: Know where your personal information is and guard it from prying eyes.

    3. Evaluate whether your credit card still meets your needs

    Start the new year on the right foot by comparing your current credit cards to your needs. It's entirely possible that the card you've had for 10 years isn't really the best card for you anymore because your life or work situation has changed.

    Pay attention to reward categories, rates and fees. You can sort by travel, cash back or gas rewards, among others. If you're carrying around a travel rewards credit card, but prefer staycations to exotic vacations, you're unlikely to use those rewards. 

    >MORE: Compare hundreds of cards here

    And that card you got several years ago before you had built up your credit score likely doesn't have as good of a reward structure or even basic terms as that for which you could now qualify. Credit card issuers issue credit cards based largely on credit score and credit history, and they offer their best perks and features to people with a track record of solid financial practices.

    A word of caution: Even if you change up your credit cards, consider keeping that old card account open. A significant portion of your credit score is based on your length of credit history, so closing a card you've had for a long time could ding your credit.

    4. Use your rewards

    Once you ensure you have the card (or cards) that suits your lifestyle, don't forget to actually use your rewards. Those points, cash back and miles don't do you any good just sitting in an account.

    It can be daunting to sort through the terms, especially because there's not a universal system, so 20,000 points could be $200 or $2, depending on the card. If you're unsure, call the card company; they'll be happy to explain.

    "Most people never use all of their credit card reward points," John Ulzheimer, president of consumer education for CreditSesame.com, said, adding that you can think outside the box when it comes to redeeming rewards. "Using credit card rewards points to buy gifts can be a great way to buy presents while saving money."

    If you still find yourself not using the rewards, consider whether that's because they just aren't the kind of rewards that best fit your lifestyle. In that case, revisit resolution No. 3 above.

    5. Teach your children well

    Kids learn financial health from their parents, so make it a goal to teach them well this year.

    Not sure where to being? There are lots of great books, websites and other resources out there. Two key suggestions: First, make sure your kids understand that credit cards are borrowed money and, secondly, drive home the point that financial responsibility is a requirement, not an option. 

    >MORE: Age-by-age guide to teaching kids about money

    6. Address any problems that are hurting your credit

    It's about as hard as uttering the words "I'm sorry," but taking a deep look into your credit report could be the best way to start your year. In this case, ignorance should not be bliss. You're entitled to a free credit report annually from each of the three major credit reporting bureaus. Request them from the official site: www.annualcreditreport.com.

    When you examine your report, take the opportunity to clean up mistakes that might be affecting your credit score. Are there credit checks that you don't know anything about? Missed bill payments for accounts you didn't open? These are tell-tale signs that your identity has been compromised and you'll need to address that sooner rather than later.

    Speaking of paying bills, if you are someone who has trouble remembering to pay things on time, consider setting up auto payments or take advantage of technology and set reminders. Missing bill payments can tank your credit score quickly, but it's one of the easiest ways to maintain and even improve your score over time.

    7. Set a budget and stick to it

    This one doesn't need a lot of explanation. Credit cards are excellent financial tools and they can come in handy during an unexpected pinch or even just to help you accrue points or rewards for a splurge down the road. But relying on spending more than you have isn't a sustainable lifestyle. No amount of credit card rewards or 0 percent introductory periods can keep you living above your means forever.

    As the new year gets underway, take the opportunity to take stock of your credit card health and wellness just like you do your physical and emotional health. You'll be glad you did.


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