Were your credit cards a little out of control in 2017? With the new year comes a new opportunity to manage both your personal and small business credit cards a bit better. Doing so can save you both time and money, while offering you a chance to earn more rewards and enjoy more benefits.
Here are five ways to get a handle on your credit cards in 2018:
1. Take an Inventory
A lot of people have numerous personal and business credit cards that they manage, and perhaps even more when they consider their spouse. The new year is a good time to see which cards you have, what their features and benefits are, and what their standard interest rate is. In fact, your card’s standard interest rates probably increased in 2017, since the prime rate went up three times through the year. You should also look at any employees or family members that are listed as additional authorized cardholders, and remove those who no longer need their card.
2. Focus on Outstanding Balances
As part of your inventory, you should also examine any accounts that have long-term debt, and formulate a plan to pay it off. Credit cards balances are unsecured debt with a higher interest rate than many other types of loans. To help pay off your small business credit card debt, you can open a new account with a 0% APR promotional financing offer for balance transfers. Or, you can consider using a business line of credit with a lower interest rate. You may also be able to save money on interest by transferring your balance to another card with a lower interest rate. And at the very least, you can contact your card issuer and enquire about receiving a better rate. If your credit has improved since you opened the account, you should qualify for a lower standard interest rate.
3. Get Organized
Having multiple credit cards can offer you numerous advantages, but they can be difficult to manage. And when you make a mistake with one of your credit cards, it can lead to costly late fees and penalty interest rates. To help you manage your cards, you can make a list of all of their due dates and the length of the grace period, which is the time between the statement closing date and the due date. Subtract the number of days in your card’s grace period from the due date, and you’ll know when the card’s statement closes each month. Collecting all of this information in one place can help you to know exactly when your monthly statement periods will end, and when your next payment will be due.
You can also organize your credit cards by enabling email and text reminders for your statements and payment due dates. And for a completely foolproof strategy, many card issuers allow you to set up automatic payments from your bank account.
4. Build Your Credit
If it didn’t take you very long to organize your cards, then you probably don’t have many. This has the advantage of simplicity, but it won’t help you to build credit as fast as you could if you had more accounts on your credit report. If you have just one or two credit cards, or have a very limited credit history, then opening up an additional account can help your credit. When managed properly, new accounts can add to your credit history and reduce your debt to credit ratio, for a given amount of debt. Both of these factors can help to improve your credit score.
5. Consider a Credit Card Upgrade
The credit card industry is incredibly competitive, and new cards are constantly being introduced with even greater rewards and benefits. And by upgrading one of your existing credit cards, you may also qualify for a generous sign-up bonus in the form of points, miles or cash back. At the same time, a new card might offer more competitive terms, rewards and benefits.
This article was originally written on January 17, 2018 and updated on January 29, 2021.