Financially Smart Strategies for Summer

[Jul 11, 2007.]

 

With the arrival of summer may come the temptation to go on a shopping spree—at your vacation destination, on the Internet, or at your local mall. However, financial experts recommend being financially smart this summer by following some tried-and-true credit management techniques.

For college students who are working their way through the summer, 2007 may be the first opportunity they've had to apply for their own credit card. Still, there's a danger that they can overextend themselves quickly, leaving them with a mountain of debt to carry with them into the fall.

A number of financial experts say now is the time for college students—and anyone else with a credit card—to work at building a solid credit rating. This means, first of all, paying bills on time. Late payments not only mean additional fees—they can also ruin your credit record. Also, be sure to stay within your credit limit, and limit yourself to one or two major credit cards. That way, you'll be less likely to engage in the kind of binge buying you'll regret later.

Think of your credit cards as tools for helping you build your credit score—and a solid financial reputation. By using them wisely, you'll become more credit-worthy in the eyes of banks and potential mortgage lenders. A good credit score will help you to qualify for zero-percent and low-interest rates on credit cards, and may also help improve your auto insurance rates.

You can actually use your charge card to help you obtain a low-interest loan. Given the interest rates available and your credit limits, you might even be able to use your credit cards to purchase a car or invest in a 401(k) plan.

By exercising a little bit of financial savvy, experts say consumers can make summer 2007 truly profitable for their bank accounts.