How Not to Labor Over Credit Card Debt

Q: I’d love to improve my credit score, but I can’t get ahead of my payments. I also find that my spending gets out of control when I’m paying with plastic. How do I use my credit cards responsibly?

A: Using your credit cards responsibly is a great way to boost your credit score and your financial wellness.

Here’s all you need to know about responsible credit card usage.

Refresh your credit card knowledge

A credit card is a revolving line of credit allowing the cardholder to make charges at any time, up to a specific limit. Each time the cardholder swipes their card, the credit card issuer is lending money for the purchase. Unlike a loan, though, the credit card account has no fixed term. Instead, the cardholder must make payments toward the balance each month until the balance is paid off in full.

Credit cards tend to have high-interest rates relative to other kinds of loans. The most recent data shows the average industry rate on new credit cards is 13.15% APR (annual percentage rate) and the average credit union rate on new credit cards is 11.54% APR.

Pay bills in full, on time

Paying bills in full and on time has multiple benefits:

• Build an excellent credit score
• Skip the interest charges
• Stay out of debt
• Avoid late fees
• Enjoy rewards from the credit card issuer

Brush up on billing

There are several important terms to be familiar with for staying on top of credit card billing.

A credit card billing cycle is the time between credit card billings. It can vary from 20 to 45 days, depending on the credit card issuer. Within that timeframe, purchases, credits and any fees or finance charges will be added to and/or subtracted from the cardholder’s account.

When the billing cycle ends, the cardholder will be billed for the remaining balance, which will be reflected in their credit card statement.

Credit card bills will also show a payment due date, which tends to be approximately 20 days after the end of a billing cycle. The timeframe from when the billing cycle ends and its payment due date is known as the grace period. When the grace period is over, and the payment due date passes, the payment is overdue and will be subject to penalties and interest charges.

Spend smartly

Do:

• When making a purchase, treat your credit card like cash.
• Remember that credit card transactions are mini loans.
• Pay for purchases within your regular budget.
• Decrease reliance on credit cards by building an emergency fund.

Don’t:

• Use your credit card as if it provides you with access to extra income.
• Use credit to justify extravagant purchases.
• Neglect to put money into savings because you have access to a credit card.

Once you have these dos and don’ts down, look for cards with low rates and valuable benefits to make it even easier on yourself. Check out our special Visa Balance Transfer offer with a rate of 1.99% APR* for 12 months. New Platinum Cardholders can receive this low introductory rate on all purchases, cash advances, and balance transfers as well**. Our Platinum Visa card gives you an unbeatable combination of low rates along with these valuable benefits:

• No annual fee
• Interest-free grace period on purchases when the balance is paid in full by the due date
• Up to $1,000,000 Travel Accident Insurance
• Extended Warranty Protection on purchases
• Acceptance at millions of merchants worldwide
• Automatic payments from a We Florida Financial savings or checking account

*APR=Annual Percentage Rate.
**Existing Cards: Offer valid for Visa Platinum only (not Secured or Credit Rebuilders) for Accounts open prior to 1/15/2021 for balance transfers initiated between 1/15/2021 and 12/31/2021. 1.99% APR is valid for 12 billing cycles from the date of the transaction with a 1.00% fee on the transaction amount (minimum $10.00). After 12 billing cycles, the balance of the transaction reverts to the standard variable APR 8.90% to 18.90% based on your creditworthiness. This APR will vary with the market based on the Prime Rate. Multiple transfers will be treated individually and expire individually. There will be a message on the statement one month prior to the rate expiration - Please be advised your 1.99% rate will end XX/XX/XX. New Cards: Offer valid for Visa Platinum only (not Secured or Credit Rebuilders) for Accounts open between 1/15/2021 and 12/31/2021. 1.99% APR is valid on all purchases, cash advances, and balance transfers for 12 billing cycles from the account opening date. A 1.00% fee will be charged on cash advances and balance transfers (minimum $10.00). After the promotional period, the entire balance on the card converts to the standard variable APR 8.90% to 18.90% based on your creditworthiness. This APR will vary with the market based on the Prime Rate. There will be a message on the statement one month prior to the rate expiration - Please be advised your 1.99% rate will end XX/XX/XX.

We Florida Financial membership is required. Membership is open to individuals who live or work in select counties from Key West to Jacksonville. Members must maintain a savings account with a minimum balance of $5 for the duration of their membership.