Tips for wise credit use

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Farm Forum

When you need credit, you need to make sure you get the best deal you can. Here are some tips.

· Shop around for the best offer and interest rate. Higher interest rate means more money out of your pocket.

· Think of credit as the use of future income. You need future income to buy things on credit.

· Don’t get a credit card just because they’re giving something away. If you are new to using credit, this can be very harmful to you. Think before you sign up for an offer.

· Pay bills on time, so you won’t have to pay late fees or jeopardize your credit history. Currently, 35% of your credit score is determined by how you have paid your bills in the past.

· Pay bills in full each month, so you won’t have to pay finance charges.

· Pay more than the minimum amount due. Debts will be paid off sooner, and you’ll save money. Credit card companies require you to pay around 4% of the total bill. This means you are usually not paying much on principal. A software program Powerpay.org can help you see how much you are actually paying on each debt.

· Know how much debt you can handle. Payments shouldn’t be more than 15% of your monthly take-home pay (excluding your mortgage).

· Get a free copy of your credit report once a year and make sure it is accurate. Information you will need to make the request: your social security number, date of birth, and address if you have moved within the last two years. Each of the three nationwide reporting companies may request information only you would know to maintain the security of your file.

Reach Karen Slunecka at 605-626-2870 or karen.slunecka@sdstate.edu.