Credit cards can be tricky. It’s important to use them wisely so they build your credit, but do not land you in debt. As a maturing family, your financial goals are probably changing. Your children may now have college quickly approaching and you may have retiring from your job on your radar. Here are some credit card basics for maturing families.
Consider using your home equity rather than your cardYou may be used to swiping your credit cards to finance major purchases, but did you know that you can use the equity in your home? Home equity loans and lines of credit are usually some of the easiest and most inexpensive ways to pay for major purchases. Keep in mind that most experts would caution you against using your home equity for everyday expenses. Instead, it is recommended that you only use your home equity for things like home improvements, debt consolidation and college expenses. Compare interest rates among home equity loans and lines of credit with your credit cards to find the most affordable way to finance a major purchase.
Consider your financial goalsWhen your kids are approaching college age and you are looking into retirement, it is probably a good idea to curb your spending on credit. Instead of making purchases with credit cards, stick with a saving and investing plan so that you can accomplish your financial goals. That way you don’t have to worry about prioritizing paying credit card interest over your family’s financial future.
Shop aroundIf you have held an account with the same credit card company for a while, it is a good idea to shop around for better rates and credit card features. Interest rates and fees are some of the ways that credit card companies make money, but they aren’t usually set in stone. If you see deals for credit cards with lower interest rates or less expensive fees, call your credit card company and see if they will match the competitors’ offers. If your current credit card company won’t give you a favorable deal, and you want to transfer your balance to another card with better rates, be sure there isn’t a hefty fee for the transfer.