Bank of America 90-Day Financial Fitness Challenge: Credit – Habit #1

Use Your Credit Wisely
Having a credit card is great in emergencies and when people might treat themselves.  But understanding the importance of credit and how to obtain and maintain it is key.  The Michigan Chronicle and Bank of America invite you to take the 90-day Financial Fitness challenge which starts today.  Join us and become more fiscally fit.
Sign up for the challenge at MichiganChronicle.com.  Take the journey with us to learn new habits and also learn more about debt, buying a new home or car, saving money and retirement.  Just like with any other regimen, you may need some incentives to stay motivated.  To help you stay on the path to financial well-being, we will give away prizes and gifts.
Let’s get started.  Sign up to take the challenge and to win prizes.  This week, we will learn about credit.
Bank of America – Habit #1 – Credit
Your credit card can bring independence, convenience and opportunity all rolled into one. When handled responsibly, credit cards can help build credit and improve your ability to borrow money in the future. Here are seven basic steps to making the most of your credit.
Use your credit cards wisely
One rule of thumb for building a strong credit history is to spend no more than 30 percent of your available credit line.  Keep your card for planned purchases, take your time hunting down the best deals and make sure you have a plan to pay off the purchase before you swipe.
Pay on time
One missed or late payment can lead to interest charges as well as late fees. Beyond that, late payments have the potential to ding your credit score.
Pay your balance in full
Paying your balance in full is the best strategy to avoid accumulating debt. But if you can’t, pay more than the minimum which can save you money in interest charges in the long run.
“Having a credit card is a great way to build your credit,” said Cathy Nedd, associate publisher and COO of the Michigan Chronicle.  “However, you still want to use the credit card wisely and only when necessary.  A credit card can increase unnecessary spending, but setting goals and maintaining a budget will help while you build or strengthen your credit.”
Know your credit score
When you go to borrow money, the first things the lender looks at are your credit history and credit score.  If you have a low credit score, or no established credit, consider starting with a secured credit card to build your credit history.
Check your credit report once a year
Now that you’re actively building credit via credit cards, it’s a good idea to monitor it. To get your free credit report, simply visit annualcreditreport.com or call (877) 322-8228. Check your report to make sure there are no mistakes.  Errors can hurt your credit score.
Monitor your account
It’s a good idea to keep track of your credit card purchases. One of the easiest ways to do this is online or via your card’s app. Depending on your card issuer, you may even be able to get automatic alerts so you can monitor your accounts with less effort. These alerts generally tell you when you’re close to your total credit line, when bill payments are due and more.
Protect yourself from fraud
Now that you’re monitoring your account for suspicious activity, remember that you should never give out your credit card number over the phone unless you initiated the call. Memorize your passwords and PIN numbers and keep them in a safe, secure location.  Check your account often to monitor for unusual activity.
Sign up to take the 90-day Financial Fitness challenge.  Visit MichiganChronicle.com for more information and to win prizes.
Learn more about managing and building your credit.  Go to Bank of America and learn more at BetterMoneyHabits.com.