But, one early evening in late Spring of 2017, two friends from high school met at their 50th anniversary class reunion . . . . . . . .
They were very much alike these two friends. Both were retired, both were still married to their college sweethearts, both had grandchildren, and both were in their 70’s.
But, here the similarities ended.
One looked happier, vibrant and younger than his 72 years. The other was stooped, and wrinkled, with deep worry lines on his face.
What caused these differences?
My dear friend, did you know that money problems could weigh you down, and make you look older than your age? Of course you know that. Don’t you?
Sure, every retiree has money problems especially in these times of economic uncertainty. But, if it’s a month-to-month reality, the stress could certainly take years away from your healthy life.
Let’s examine these two friends more closely.
It’s not about the one having more money than the other. Both have had successful careers in the corporate world.
It’s not that one was rich and the other one was poor. Both came from well-to-do families.
It’s not that one was more intelligent than the other. Both had been better than average students in school.
The big difference lie in . . . . .
. . . . the fact that one was money smart and the other was not.
He was smarter in credit management.
So, it was that upon learning of his friend’s predicament, he shared his five credit management secrets with his friend.
Here they are:
The 5 secrets to building a healthy credit
1) Build a history of stellar credit performance. A long and healthy relationship with your credit card company establishes your reliability as a credit card holder. Potential lenders will eye you as a good prospect and would take the opportunity to make offers.
However, it would be to your advantage to not fall quickly into new loans. Analyze your financial situation.
If you need to take on a new loan, as prime client potential, you have the leverage to get the best terms possible. The card companies will be competing with each other to have your business.
If you have outstanding accounts, pay off your debts as quickly as possible.
When you have paid-off your debts, don’t cancel your accounts altogether. Once you stop doing business, your credit history is relegated to limbo.
To keep your credit score healthy, experts suggest, you should use your card at least once a month and pay off the balance immediately.
2) Pay in full if you can. Rather spending your extra cash on shopping, or dine-outs, pay-off your credit card balance for the current month.
Paying-off your entire balance each month instead of just the minimum will save you money from high rates. It’s like getting a short-term loan with zero interest.
You could save thousands in interest a year by doing this.
3. Get out of debt as soon as you can. Adding an amount to your minimum balance will get you out of the hole sooner.
For example, a $4,000.00 debt with an 18% APR, would get you more than $2,000.00 in interest if you pay just the $100.00 minimum. But, by adding just $25.00 to that minimum you would save over $400.00, and get you out of debt sooner.
The law requires credit companies to disclose how long you’re going to pay with just the minimum, and how much it’s going to cost you over that same period. Be informed. Check out your monthly bill/statement for this information.
4. Make multiple payments each month; split your balance due. Most major credit companies allow you to make multiple payments a month.
If you can pay every 15 days you could lessen your burden for the month. You would also be reducing the amount that’s accruing interest.
You can time your payments with your paycheck or pension check. This will give you some wiggle room, and give you more control of your cash flow.
5. Slash your interest with the ladder method. If you have several credit cards, with multiple outstanding balances, credit experts recommend you should pay-off the ones with the higher interests first.
Start at the top of the ladder with the card that has the highest rate and pay more than the minimum to get off that one quicker, while you stick to the lower payments on those with lower rates.
Once you’ve paid off that one on the top rung, work your way down to the card with the next higher rate. Continue with this process until you hit the lowest rung.
This strategy is good if your head is barely above the water, or completely under. You’ll pay less in finance cost over the long haul, and your debt-reduction dollar goes along way.
The reunion indeed with two friends being happy.
One was happy that he was able to help his friend. The other was happy because he now had something to give his bad credit situation a significant make-over.
But, before they parted, the smart friend, with a wink, told the other that he has something more the next time they meet.
Don’t you think that these secrets were really sound advice and you should do the same with your own credit?