SafeAmerica Credit Union

Bay area community

• By Kevin Alvarez

Coping with Inflation

Inflation continues to put pressure on household budgets. From groceries to gas, record-breaking inflation means the purchasing power of your money is decreasing each month. Below you will find guidance on how to best navigate a time with high inflation.

1. Take Inventory of your full financial picture. Has your household income changed? have you adjusted your budget for rising groceries, transportation, or other expenses? Check your existing budget to see where you stand and where your money is going. If you don't have a budget, it can help to create a simple spending plan or roadmap of monthly expenses. A good place to start is to use resources like a budgeting worksheet track your monthly income against current expenses.

2. Continue to build an emergency fund to tap into when unexpected circumstances arise like a medical expense or costly home repair. An emergency fund helps reduce the chance of taking on debt to cover an unplanned expense. It might be tempting to pause monthly savings as rising prices take a bigger bite out of your monthly budget, but resist the urge. Put savings on auto pilot with each paycheck. Even a small amount will add up over time.

3. Prioritize monthly spending in a time of rising prices. Rethink certain monthly expenses such as subscription or streaming services. According to researchers, the average household has 4.5 streaming services and spends an average of $55 on them per month. This may not seem like much, yet $55 a month adds up to more than $600 per year. If you’re trying to cut expenses in the face of higher prices, ditching underused subscriptions can be a good place to start. As essentials get more expensive, figure out your new baseline. Limit credit card use and curb discretionary spending (dining out, entertainment). GreenPath’s Aligning Priorities workbook can help you make these decisions.

4. Monitor debt, especially as interest rates rise. Paying off high-interest credit card debt saves you money in interest, improves your credit score, and frees up room in your budget. Choose a debt payoff strategy that works for your situation. Consider GreenPath’s Debt Management Plan which helps you pay off unsecured debt in 3 to 5years. GreenPath can work with many creditors to bring your ac-counts current, lower interest rates, and eliminate fees.

5. Shop smart. Research the best sales, coupons, and specials, especially on products that are low in inventory. Check dollar stores for deals on household items and stock up on those items where possible. Bulk retailers or wholesale clubs might be a good way to stock up on items in large quantities for a lower per-use cost. Strategically plan your higher-cost purchases. Swap out brand-name items for generic as much as possible.

6. Keep tabs on your credit history. In times of rising prices, it pays to keep tabs on credit history, which is used to calculate your credit scores. The three digit number of your credit score helps determine whether lenders approve you for new credit and what interest rates they offer. Annualcreditreport.com is a trusted “one-stop-shop” to check your reports from Experian, Equifax, and TransUnion – the three industry-standard credit bureaus. You can also work with GreenPath to review your credit history.

7. Get independent guidance from a nonprofit financial counseling agency like GreenPath. Counselors look at your entire financial picture to help you ease financial stress and uncertainty, through access to clear information and a personalized action plan.

Information brought to you by our partner, GreenPath Financial Wellness

GreenPath Financial Wellness

• By Kevin Alvarez

Is My Employer’s Life Insurance Enough?

If you’re like a lot of people in the workforce, you might have signed up for your company’s life insurance program as soon as it became available. Registration was simple, and the insurance most likely costs you little or no money. Choosing to join might have been an easy decision.

But is basic life insurance through an employer enough to meet your needs? According to a survey, 29%1 of workers believe that it is. But you might be shocked to discover that it may not be.

How Does “Work Life Insurance” Work?

Employer-provided life insurance is a type of group life insurance because the plan covers everyone who chooses to participate at your company. Employers enter into a contract with a central insurance agency to provide life insurance coverage conveniently to all their employees.

Employer-paid life insurance often means that your company will pay the entire monthly bill for your insurance. But this isn’t always the case. In some instances, your employer will pay most of the cost, but you’ll still have to pay a small amount that’s typically deducted from your paycheck.

Why Do Employers Offer Life Insurance?

Group life insurance makes an excellent addition to an employee benefits package. Companies that offer free life insurance often have a hiring advantage over a business without a group plan.

One reason for the benefit’s popularity is that even workers with serious health issues usually find it easy to get insurance through group coverage. Everyone at the company automatically qualifies because the insurance company doesn’t mind accepting the risk of insuring a person with health challenges as long as most of the other insured coworkers are healthy.

How Much Does An Employer Provide?

The median coverage for a company employee is $20,000 or one year’s salary.1 Some companies may offer you a plan that pays two or three times your salary.

If you need more insurance, employers may give you the chance to purchase an additional amount of insurance through the company’s group plan. Even then, however, there are still a few points to consider before deciding whether employer-provided insurance meets all your coverage needs.

Does My Employer’s Life Insurance Meet My Needs?

Is the amount of coverage your employer offers enough for your family? Will they be able to get by on $20,000 or on the equivalent of one or two years of your salary?

One consideration may be whether you want enough insurance to help pay off your debts and provide for your children’s education. In addition, there may be other reasons why you need a larger insurance payout than what your employer’s insurance offers. For example, you may have an aging parent who relies on your income. In that case, you may want to factor in the cost of providing quality nursing care for that person after you’re gone. If you have questions about your needs, speak to a licensed agent.

Even if you are able to apply for more coverage through your employer-provide coverage, you may have to answer medical questions or get a physical. In that case, some medical conditions could prevent you from adding to your policy. Or you might be asked to pay more than you can afford.

Does My Employer-paid Life Insurance Carry Over From Job to Job?

Maybe the biggest drawback of relying entirely on life insurance from your employer is that, in most cases, the insurance provided by your company covers you only as long as you remain at the company. Typically, the insurance coverage stops when you leave, whether it’s because you resigned or because you were laid off or fired. If you see yourself leaving your job at some point in the future, you will need to think about how to replace the coverage you had. If you’re lucky, your new employer might also offer life coverage. But there’s no guarantee it will.

One Option: Convert Employer Insurance To Personal

One way around the problem of losing your life coverage when you leave your job is to convert your employer-provided life insurance to personal life insurance, if your company gives you that option. Usually, no medical exam is required when a person makes the change. But once your coverage goes from group to personal, you, rather than your employer, will be responsible for making your full monthly payments. And at that point you might be able to get a better deal on both the cost and the amount of coverage if you just leave the employer policy behind and shop around for a new insurance policy.

Should You Get Life Insurance Outside of Work?

The insurance provided by your employer is a great benefit. But it may not be enough. So, carefully calculate how much insurance your family needs and, if you need more coverage, consider purchasing a separate personal policy in addition to the group policy you have through your workplace.

SafeAmerica Can Help

Trustage Life Insurance

Life insurance can be a simple, affordable way to help protect your family if you pass away. It can provide your loved ones with money to help pay for things like mortgage or rent payments, day to day bills or medical and funeral bills. SafeAmerica has partnered with Trustage to provide you with affordable, member-only pricing on life insurance and more.

For more information and to get an instant online quote, click below. 

SafeAmerica: Home, Auto and Life Insurance

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Although SafeAmerica has approved this as a reliable partner site, please be advised that you will no longer be subject to, or under the protection of, the privacy and security policies of the bank's website. The other party is solely responsible for the content of its website.

We encourage you to read and evaluate the privacy and security policies on the site you are entering, which may be different than those of the bank.

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1 2021 LIMRA’s Life Insurance Barometer, “Top Misconceptions About Life Insurance”. 

• By Kevin Alvarez

Tips For New Credit Card Holders

For those starting their college career or their professional career, keep your eye out on offers for credit cards. These life milestones are often signals to lenders that the time might be right for you to get on board as a credit card holder.

Figuring out how to manage credit cards is critical for new borrowers. We suggest to start by asking yourself the following:

  • Is using a credit card the right way to pay for the purchase? Would cash or a debit card work just as well?
  • Is it clear how interest is charged?
  • Will any credit card fees be assessed?
  • Once the charge is made on the card, is it easy to track the minimum payments and due dates?

It can be helpful for borrowers to run through these questions for each card.  Knowing due dates, minimum payments and other terms is very helpful towards using credit cards wisely.

Advice To Follow

After you ask those questions about the basics, it also pays to think ahead.

Many people who have run into challenges with credit cards have told us that the most important advice to follow is to make payments on time, keep credit card debt manageable, pay off balances and maintain low balances to avoid interest and late charges.

If people only make minimum payments and keep making purchases, their debt will quickly grow, increasing financial stress and derailing their financial future. If a person gets into the habit of making late payments or taking on more debt than they can handle, then the credit score will suffer and they will have to take additional steps to repair the damage that been done.

New borrowers are wise to understand their current financial picture, their spending habits, and the pros and cons of how access to credit will impact their specific financial situation.

Where To Start?

As those credit card offers fill up your mailbox, it can be confusing to know where to start. Credit cards are available with many options. Compare different cards based on your needs and the card terms.

For students and new borrowers interested in using credit cards wisely, it is helpful to look at the following:

  • The annual percentage rate (APR): This is how much interest you will pay if you do not pay off your balance each month. Also, for many credit cards, rates may increase after a short period of time.
  • Fees: Many cards have yearly fees. Most charge for late payments, balance transfers, cash advances, or spending over your credit limit.
  • Credit limits: Your credit limit is right for you when it is in line with what you can afford to pay back. Many people we work with find that high credit limits offer challenges when it comes to managing the balance owed.
  • Figure out how many credit cards Is the “right” amount.
  • Managing just a few credit cards can be easier than having many cards.
  • When you reach the spending limit on one card, it’s best to manage those payments before shifting your purchases to another card.
  • Planning monthly expenses and setting a budget is the best way to easily adjust your spending habits.
  • Keeping your receipts helps with keeping track of monthly activity.
  • Having a plan will help you reduce the chance of impulse buying. When you have a plan, there’s less chance you will overspend on items you don’t truly need.
  • Review the different payment options: Is it easier to pay through an app or at a website or over the phone? Usually people can set up automatic payment drafts to pay the full balance or just the minimum payment by the credit card due date.
  • Many new borrowers find that it is necessary to use credit cards to cover important expenses such as food, gasoline, and utilities. If that becomes a regular pattern, it is helpful to review your budget.

New Credit Card Users — Next Steps

Remember: Every time you use a credit card, you take on debt, and debt is borrowing money you haven’t earned yet. It is wise to always keep the focus on this fundamental truth.  Beware of high interest credit cards that can become difficult to pay back if financial circumstances change unexpectedly.

It’s all about the basics: looking at monthly expenses, looking at income and setting spending priorities as well as building up emergency savings. As a new credit card holder, these principles will be the building blocks of achieving financial success!

brought to you by GreenPath Financial Wellness

Youth Month

Save small. Dream big.

We're celebrating Youth Month all April long! Be sure to check out our blog each week or follow is on social media for a new youth financial literacy topic.

You can also check out our Youth Program to help get your child started on the path to smart money management.

Visa Platinum Reward Credit Card

• By Kevin Alvarez

Teaching Children How To Budget

Teaching children how to budget at a young age will be helpful for them later in life. When your child gets money as an allowance or as a gift, you can help get them started with simple budgeting concepts.

Start With Goals, Wants And Needs

Talk with your child about money and how to use it wisely. Talk about their goals for their money.  What do they want? What do they need? There may be short-term goals they can be purchased right away. They may have long-term goals that will require them to save over time. It is helpful for children to have a reminder of why they are saving and why they should not spend all of their money now.

Save, Share and Spend Method

“Save, Share and Spend” is a method for children where they set aside money toward each of these three things.

Save

When your child earns money, they should first set aside a portion for savings. The recommendation is to save at least 10% of earnings. This percentage can be increased for children because they have fewer expenses. Savings can be accumulated in many ways. Some use a jar, piggybank or even a joint bank account to gain interest. The savings account should be kept for emergencies (new bike tire) as well as longer-term goals (first car).

Share

Teaching children about charity at a young age is also useful. Allow them to research and contribute to a charity of their choice. Sharing is typically around 10%. Discuss options with your child to determine which cause they may enjoy helping. Also consider having them volunteer with that organization to see what they are actually helping. For example, it can be very rewarding for children to use money to purchase toys for a local outreach center. Then they can help pass out those items out to needy families at Christmas.

Spend

The remainder of their earnings can go toward spending. The spending category is available so your child can make purchases they choose, but remind them that additional savings will help them reach their long-term goals faster.

Start Small, And Set An Example

It is helpful for your children to see how you budget, but start small. For example, allow them to help you plan the weekly grocery shopping. Start by planning a list from sale flyers and coupons, and then stick to that list at the store. This can turn into a saving game for them.  Remember, children will learn from your example.  So telling them about budgeting is important, but it’s much more impactful if they see you following a budget yourself.

This information is brought to you by GreenPath Financial Wellness

Youth Month

Save small. Dream big.

We're celebrating Youth Month all April long! Be sure to check out our blog each week or follow is on social media for a new youth financial literacy topic.

You can also check out our Youth Program to help get your child started on the path to smart money management.

youth program

• By Kevin Alvarez

Financial Literacy For Kids

Did you know April serves as both Financial Literacy and National Credit Union Youth Month?

It’s never too early to begin teaching our youth about money. Financial literacy taught at young age becomes foundational value in adulthood. In fact, this is one of the most important areas where you can truly change the course of your child’s life. Financial literacy for kids can be fun. Educating your children about financial wellness will help them build healthy spending habits for the future and SafeAmerica Credit Union is here to help!

We're kicking off April with a series of financial education blogs to make it easier for parents to get the ball rolling for their children’s understanding of financial skills. All month long we will be sharing different concepts, financial terms and talking points for you to go over with your youth.

Here are some fun ways to teach your kids about money.

1. Play Games That Involve Money

One of the best ways to teach a lesson is by doing so without your child even realizing they are learning. Play games that include a financial component like Monopoly or Life and help your child strategize during the game. This will help your child learn the importance of budgeting and planning for the future, all under the guise of play.

2. Make A Wish List With Your Child

An important part of financial literacy is creating a set of priorities. We can’t have everything we want all at once, but if we plan ahead, we can hit our goals over time. This is a lesson that children can learn. Sit down with your child and have them list 10 things they want. Then have them rank them from most important to least important. Once the list is created, strategize with your child about how they can achieve their wishes.

3. Teach While You Shop

Take your child shopping and actively explain your decision-making process. When you arrive at the store, tell your child how much money you have to spend and what your priorities are. Show your child why you are picking one item over another and explain things like discounts and coupons. Additionally, give your child small amounts of money to spend themselves. You’ll be surprised at how happy your child will be to spend $2 on anything they want! They’ll also learn the importance of spending with a limited budget.

4. Link Allowance To Chores

To teach your child that money is earned through work, make sure the connection between allowance and chores is clear. You can do this by only giving your child an allowance after his or her chores are completed. When your child does an exceptional job, you can even pay them a bonus as a reward for good performance. This will instill the lesson that you have to earn money—it isn’t owed to you.

5. Split Money Into Categories

Get a piggy bank that splits money into spending, saving, and giving. Teach your child about what each section represents and how they are permitted to use the money in each section. Every time you give them their allowance, talk them through how they plan to allocate their funds. Place the piggy bank next to your child’s wish list, so that their spending and saving goals are clear to them. Also, talk through the causes your child thinks are important, and when they hit a giving goal, donate the money to that cause in your child’s name.

In short, teaching children about finances can be easier than it might seem. It just takes a bit of forethought, a little patience, and some creativity. Once your child learns the basics of finances, you can increase their financial responsibilities by upping their allowance or bringing them into the conversation about family financial matters.

And remember, a financially literate child grows into a financially responsible adult!

This Information is brought to you by GreenPath Financial Wellness

Save small. Dream big. We're celebrating Youth Month all April long!  Be sure to check out our blog each week or follow us on social media for a new youth financial literacy topic.

You can also check out our Youth Program to help get your child started on the path to smart money management.

Youth Program

• By Kevin Alvarez

Budgeting 101

Many people find that the journey to financial wellness is smoother when they take the time to create a budget. It might sound complicated but there is a way to break down the process. To get started, see this overview on the steps to take to set a budget and take control of financial health.

Needs vs. Wants

Everyone has a certain amount of money to spend each month. So you need to separate your needs from your wants.  Your needs include things like food, medicine, child care, and housing. These are things you can’t live without. Once your needs are taken care of, any remaining money can go to wants. These items are nice to have, but not needed to live.  These might be things like cable TV or dinners out.

Being clear on the difference between the things you need, and the things you want is one of the keys to budgeting, especially if money is tight. Resist the temptation to spend money on credit cards to buy things that you don’t need. Living within your means is an important milestone on the journey to financial health.

Define Your Monthly Income

The first step in creating a budget is to define your monthly income. Most people think income is what they earn from their job. But it is vital to include all sources of income in your budget. This includes things like side-jobs and child support.

Next, document the net amount you get from each source. Net income is the amount of money you get after taxes. This is the amount of money that you have available to spend.

Figure Out Your Major Expenses

Your next step is to write down all of your major expenses. Subtract them from your net income. Examples of major expenses include housing costs, auto payments, and insurance. These are fixed costs. You need to pay them each month. Some major expenses can be paid from quarterly. For these, it is wise to divide the expense over several months.  For example, a quarterly payment is divided over 3 months. Set aside money each month for these expenses. Pay them when they become due.

Setting Realistic Goals

The money leftover is for items such as food, gas, and credit cards. It may be hard to define how much you spend on food or gas each month. Try your best to guess for the first month. As the month goes on, track your spending. After you have a clearer idea of your expenses, you can update your budget.

Cover High Priorities First, and Set Goals

It’s important to use your available funds to cover your high-priority bills first. You might be surprised at how much money is spent on wants. You can decrease spending by limiting your budget for the “wants” (often called discretionary spending). For example, if you spend $100 per month on dining out, only put $50 in your budget, and stick to it. It takes restraint, but it’s well worth it. The money that you save can go toward paying down the principal of your debts faster (and saving you money on interest). Or you can build your savings or investments.

Stick With It

It will be difficult at first. Most changes aren’t easy. You’re changing your mindset toward your money. That takes time. But the longer you do it, the easier it becomes. It won’t be too long before your budget has become your habit.

Tracking Expenses

Tracking expenses is a key part of the budget. This is how you know if you are staying within the budget you created. For example, you may have allotted $150 for groceries this month, but if you do not track your expenses carefully, you may never notice if you spent $225. Spending more than the budgeted amount in one area requires you to decrease spending in another area. The only other option would be to borrow money on credit, which gets costly if used too much. Tracking expenses will also help you to see where your money is going. You will learn a lot after you spend a month tracking your expenses.

There are several ways to track expenses. The most basic method is to write down all of your expenses in a notebook each day. If you choose to track your expenses in a notebook, make sure to carry it everywhere you go. Otherwise, you may forget to record an expense. When you’re documenting everything, it may be easier to label your spending.

Another technique is to save receipts and document them in a computer. Keep in mind that you may spend money on items for which there is no receipt, like a donation to a co-worker’s birthday gift.

If you use a debit card, you can track your debit card statements. Most banks have websites that allow you to view all of your checking account.

If you like to use a computer, you can track expenses using a software program. Some programs can even be linked to your bank accounts. This allows for immediate updates.

No matter what method you choose to use, it’s key to enter your expenses on a regular basis.

Budgeting As A Family

Budgeting should be a family project. Since everyone in the household is affected by the budget, everyone should be aware of what is available to spend — or not spend. Often, there is one designated person in the family that handles the money — balancing the checkbook, paying all the bills, providing allowances, etc. That job can be very stressful if that person does not have the full support and understanding of everybody in the family. A healthy and open approach to money management is good for the entire family.

Set SMART Goals

When developing a family budget, it is good to establish some goals that the family can strive for together. For example, if the whole family knows that their goal is to save for a new house, it will be easier to resist overspending on holidays and entertainment. When establishing goals, it is important to make them SMART: Specific, Measurable, Attainable, Realistic and Timely.

For example, if the goal is to save enough to make a down payment on a new car, a SMART goal might sound something like, “We will set aside $200 each month until we have saved $5,000 for the down payment on our new car.” This goal is very specific and measurable. The goal is also timely because you know exactly how long you will have to set the money aside (for as long as it takes to reach $5,000). However, if you do not have $200 to set aside, this goal would not be attainable or realistic. So it’s important to set the dollar amount at something that you can afford.

Keep Goals Top Of Mind And Support Each Other To Reach Them

After developing goals, write them down so you can post them for all to see and review them periodically. It brings a sense of accomplishment to see goals being achieved. Seeing the goals on paper will also inspire you to keep saving for your financial goals. You will recall from the earlier section that setting up a realistic budget involves a balancing act between what you earn and what you spend. You should be allocating money based on the financial goals and values established by your family.

Teachable Moment: Include Your Children In The Process

Parents often ask if they should include their children in the budgeting process. While the children may not need to know how much their parents earn, it is still important to teach children that money is a family asset that is needed to provide the essentials of food and shelter. Too often children are not taught that money is earned through hard work and needs to be spent wisely and carefully. If children know parents are serious about their financial goals, they will often help with them. Children may even help hold you accountable when you think of overspending. If you're interested in starting your children on their own financial journey, SafeAmerica Credit Union offers a Youth Program that can help! Visit https://www.safeamerica.com/youth-program for more information.

This information is brought to you by GreenPath Financial Wellness

• By Kevin Alvarez

Why Refinancing Your Auto Loan Makes Cents!

When saving money pivots to the top of your priorities, an auto refinance may be an opportunity to create instant savings on your monthly auto payment. Everyone’s financial situation is unique, so it may or may not be a financial fit for everyone.

Here's How:

When you refinance your auto loan, what is actually happening is your loan is being paid off and the balance is transferred to a new lender (who may have a better rate and/or term like SafeAmerica’s current auto refinance promotion).

When It Makes The Most Cents:

The whole point of refinancing is to purposely switch from your current interest rate and payment terms to a lower interest rate and better terms. Of course, shopping around for lower rates is the first step towards identifying if you can create monthly savings for yourself.

Maybe you obtained a higher earning position since you first took out your auto loan or even have seen an improvement to your credit score. Either way your chances of qualifying for a lower rate are dramatically higher than when you first got your auto loan interest rate.

While lenders use numerous factors which all contribute toward the determination of your rate, a good point of reference would be to focus on your debt-to-income ratio along with checking if your credit score has improved.

Here's Another Situation To Consider:

If you are unable to qualify for a better rate, you may be able to extend your repayment period. While you would be extending the amount of interest paid, you would be reducing the amount of money owed on your monthly payment. Just know, you will be paying more interest over the life of the loan even with your monthly payments being smaller.

Do your research and make sure to shop around for rates and terms you are comfortable with and more importantly, make the best decision for your specific financial situation. Be aware of any fees lenders may charge to refinance your auto loan. It's also important to be aware of your vehicle’s equity, age and total mileage. All are important vehicle trait’s lenders take into consideration and ultimately determine if your vehicle qualifies for refinance.

Credit unions more often than not, offer incentives and reduce fees to attract members and help them save. See what SafeAmerica Credit Union has to offer for Refinancing your Auto Loan!

Refinance with SAFEamerica credit union

• By Kevin Alvarez

Get Ready For A Credit Card Spring Cleaning

Take an inventory of your consumer credit cards. Pull out seldom-used credit cards tucked away in the recesses of your purse or wallet or stashed in the bottom of your junk drawer. Destroy any cards you no longer use.

For those cards that you do use, try not having the plastic at your fingertips. This prevents you from increasing your debt.

1. Take Inventory

Take an inventory of your consumer credit cards. Pull out seldom-used credit cards tucked away in the recesses of your purse or wallet or stashed in the bottom of your junk drawer. Destroy any cards you no longer use.

For those cards that you do use, try not having the plastic at your fingertips. This prevents you from increasing your debt.

2. Review Your Credit Reports

One in three Americans has never checked their credit report, according to a Bankrate study.

The information in your credit reports is used to calculate your credit scores — those three-digit numbers that help determine whether lenders approve you for new credit and what interest rates they offer you. In some states, employers can request access to your credit reports during the job interview process, because your credit history is seen as a reflection of your overall reliability.

Annualcreditreport.com now allows weekly updates of all 3 bureaus. If something’s inaccurate, there are ways to reach out to credit bureaus for resolution. It’s a “one-stop” to check your reports from Experian  Equifax, and TransUnion – the three industry-standard credit bureaus.

3. Take A Deep Dive Into Credit Scoring Categories

After you’ve reviewed your credit reports for accuracy, it’s a good idea to learn how your information and activity are used for credit scoring.

To understand how your credit score is calculated, know that each credit bureau has its own methods of scoring. They generally follow a similar calculation that weighs usage and activity in the following ways:

  • Payment history (35%): A history of your credit usage allows lenders to grade your level of risk and dependability. It accounts for the largest chunk of your credit score (35%), so it’s important to pay your bill on time and avoid risky behavior.
  • Amounts owed (30%): Also known as credit utilization, this category compares your overall debts owed — e.g., credit card balances, mortgages, auto loans, etc. — and compares them to your credit limit.
  • Credit length (15%): A lengthy credit history is a sign of responsibility. This category looks at the age of your oldest credit account and the average age of all your credit accounts.
  • New credit (10%): This category is a balancing act of action and restraint. While it’s important to open new revolving and installment accounts to keep your report active, too many credit inquiries can lower your scores.
  • Credit mix (10%): The credit bureaus value experience, so they like to see a mix of different kinds of debt — credit cards, installment loans, mortgages, etc.

4. Address Your Debts

Nearly half of all Americans carry credit card balances from month to month. With a healthy history, your credit card provider may be willing to lower the APR on your balance, making it easier to tackle the principal amount. Contact customer service and ask about their policies.

Another idea is to better track and manage monthly spending in favor of debt reduction. For example, consider canceling your expensive cable service in exchange for a streaming service. If utility bills are high, ask for a free energy audit of your home to identify money-wasters. Freeing up extra monthly income can help you take control of your debts and improve your credit score in the process. A spending plan worksheet can be of great help.

5. Safeguard Your Identity

We regularly hear about data breaches that impact consumers. Be sure you are doing all you can to monitor and manage your online safety, from better password management to signing up for Equifax’s free credit monitoring service to safeguard your information.

Store your social security number, online passwords and other identification in secure locations or protected password management file. While you can’t always control who sees your information, you can take a proactive stance when it comes to identity theft.

The Benefits of Credit Card Spring Cleaning

A credit card spring cleaning is a good chance to understand maintenance you might need to get things in order and improve the performance of your overall financial situation. You might also look into a debt management plan for additional options.

Our partners at GreenPath Financial Wellness offer free financial counseling and education to support you in meeting your financial goals. Their professional, caring financial coaches will work with you to assess your situation, explain the options or solutions available, and help you create a spending plan to meet your goals.

Greenpath Financial Wellness