Money Management

Keeping tabs on your credit is important. Read on to see how easy it is, and what you should look for. 

At this point, we only have a couple of weeks left in 2023. And while you may be focused on the financial moves you want to make in the new year, there’s one important move you still have time to make this December — and it could set you up for a lot of success in 2024.

Check your credit report

Reading your credit report may not be quite as much fun as reading your favorite blog or magazine. But it’s an important read nonetheless.

Your credit report is a snapshot of your borrowing history. Paying attention to your credit report could help you take steps to improve your credit score in the new year. The higher that score, the easier it becomes to not only get approved for a loan, but at a more favorable rate.

How to access your credit report

It used to be that you could only access your credit report for free once a year from each of the three credit reporting bureaus — Experian, Equifax, and TransUnion. During the pandemic, credit reports became accessible for free on a weekly basis due to an uptick in financial fraud.

After extending that provision several times, the change eventually became permanent. So all you have to do is go to AnnualCreditReport.com and request your free report there.

Things to pay attention to

Your credit report will give you a rundown of your borrowing history and open accounts. Some of the things you’ll want to look for are your:

Existing credit cards, loans, and lines of credit

Make sure you recognize each one that’s listed on your credit report. Any account you don’t recognize is one you’ll need to investigate. Perhaps a loan or credit card was opened fraudulently in your name. Reach out to the issuing party as a starting point, and from there, loop in the reporting bureau. If the issuing party has no record of an account in your name, get in touch with the bureau listing that account and ask to have it removed.

Your current loans and credit card balances

If you see that your credit card balances are on the high side, make a plan to whittle them down. Even if you’re making your minimum payments on your credit cards on time every month, you could still damage your credit score by using too much of your available credit at once. As for installment loan balances, you don’t necessarily have to worry about those so much if you’re paying them on time, but it’s still a good thing to know what you owe.

Your payment history

Pay attention to delinquencies, like late or missing payments. If you see a delinquency that’s inaccurate, follow up. It could be that you paid your mortgage a few months ago but somehow that payment wasn’t properly recorded. Correcting an error like that could boost your credit score.

All told, you generally don’t need to check your credit report every week. But if you haven’t yet given it a look in 2023, carve out some time before the end of the year to read through it thoroughly. That way, if you notice items you need to address or work on, you can do so right away and set yourself up for a successful 2024.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More 

Tipping excessively can impact your finances. But you can tip wisely and give thanks in other ways. Here are some ideas. 

These days, you may feel as if you’re constantly being prompted to leave a tip. Many retail stores, cafes, and coffee shops use payment processing systems that display a tipping prompt after you swipe your credit card. You may feel extra pressure to leave a tip in these scenarios, even when minimal service is provided. But it’s essential to keep your personal finances in mind so you don’t overspend. Here are some ways to show appreciation without going broke.

Send an email to express gratitude for a positive interaction

If you’re visiting a retail store or cafe and have a fantastic experience with a particular staff member, there are other ways to show appreciation beyond leaving a tip. Of course, you can thank them for going above and beyond and being so helpful. But you might also consider making a phone call or sending an email to share details of your positive interaction.

An email is an excellent option because the business owner or manager can read it when they have time. Be sure to mention the employee’s name when sharing your experience. You may help that staff member get the recognition they deserve and help brighten their day. It might even lead to a bonus for them, or perhaps a more generous raise from their employer. This solution lets you give thanks without depleting the funds in your bank account.

Keep extra change on hand for small tips

At many cafes and fast-service restaurants, customers order and collect their food or drinks at a counter and have minimal interactions with employees. In these situations, you may want to give some thanks but don’t want to leave a 20% tip, since you didn’t receive full service.

You can show appreciation without breaking the bank by leaving a small cash tip instead. You can keep change and $1 bills in your wallet for these situations by leaving a small tip in the tip jar. You show appreciation without overtipping or racking up an expensive credit card bill.

Leave a good review

Small businesses especially appreciate feedback. It helps them discover their strengths and find ways to improve to meet the needs of their customers. When people like you share their experiences, it can encourage others in the community to support another local business.

If you want to show appreciation for a great experience, you can leave an online review. Leaving a review on Facebook, Yelp, or Google Maps is a simple way to make a significant impact. It costs you nothing, takes minimal time, and can help the business increase its customer base.

Save your generosity for holidays and special occasions

If you tend to be a more generous tipper but want to get better at following a budget, you may want to alter your tipping strategy. Instead of always leaving a bigger-than-expected tip, save your extra generosity for holidays and special occasions. Your extra appreciation is appreciated, especially if it’s someone you interact with regularly, like your hairdresser or esthetician.

But if you’re always leaving a big tip, it could make reaching your financial goals harder because you’ll have less money left in your wallet. It’s okay to be generous, but you don’t have to go above and beyond every time you leave a tip. The next time you’re about to leave a tip, consider implementing one of the above strategies so you can give thanks without going broke.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More 

In some cases, sticking with the credit cards you have is better than applying for new ones. Read on to learn why. 

If you’re someone who uses credit cards regularly, then you may be inclined to apply for a new card — or several new cards — once the new year kicks off. In some cases, that may be perfectly fine. But if the following circumstances apply to you, then you may want to decide that 2024 will be a year when you won’t apply for any new cards at all.

1. You’re already in credit card debt

As of the third quarter of 2023, Americans owed a collective $995 billion on their credit cards, says TransUnion. If you already have a pretty hefty credit card balance that you’re trying to pay off, then you may not want to apply for any new credit cards until it’s whittled down to $0.

If you get a new credit card, you may be tempted to spend more than what you can comfortably afford to pay off. And you don’t want to spend months working to chip away at an existing balance, only to then rack up a new one.

2. You’re gearing up to apply for a mortgage

When you’re applying for a large loan like a mortgage, it’s important to keep your credit score in the best shape possible. In some cases, even a small drop could spell the difference between qualifying for a more favorable borrowing rate versus one that’s more costly over time.

Note that any time you apply for a credit card, a hard inquiry is made on your credit record. That will usually result in a modest drop in your credit score — somewhere in the ballpark of five to 10 points.

Normally, that’s not such a problem. But if your credit score is right on the cusp of rendering you eligible for a better mortgage rate and it drops by seven points after you submit a credit card application, you could end up stuck with a higher rate on a mortgage for what could be 30 years of payments (or at least until you’re reasonably able to refinance).

Furthermore, if you apply for several credit cards in the new year, it might send a message that you’re heavily reliant on credit. And that alone might dissuade a lender from writing you a mortgage even if you’re otherwise in a good enough financial position to afford one.

3. You’re not anticipating a period of higher-than-average spending

A big reason some people are tempted to apply for a new credit card is to take advantage of a generous sign-up bonus. But these bonuses usually impose a pretty steep spending requirement. And if you don’t anticipate a period of higher spending than usual, then you may not end up being able to snag a sign-up bonus anyway.

Let’s say you come across an offer for $300 cash back for spending $3,000 over a three-month period after opening a new card. If you normally only charge $600 worth of expenses each month on a credit card, then that’s just $1,800 in spending over three months, which is a ways off from $3,000.

Now it’s one thing if you’re planning a big trip in 2024, or are planning to upgrade some electronics or buy new furniture. But if those expenses aren’t in your plans, then you may not end up being able to capitalize on a bonus offer.

In many cases, there’s nothing wrong with applying for a new credit card here and there as long as you’re managing your balances and are paying them off in full. In general, it’s a good idea to wait about six months between credit card applications. But if any of the above factors apply to you, then you may not want to add any new credit cards to your personal mix in 2024.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

If you’re using the wrong credit or debit card, it could be costing you serious money. Our experts love this top pick, which features a 0% intro APR for 15 months, an insane cash back rate of up to 5%, and all somehow for no annual fee.

In fact, this card is so good that our experts even use it personally. Click here to read our full review for free and apply in just 2 minutes.

Read our free review

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

 Read More