Credit card tips for January 2017
January is a聽time to reflect on the year just passed and to make聽resolutions to improve your life聽in the year to聽come. When it comes to聽, the Nerds have some tips on how can you make 2017 better than 2016.
Include credit card debt in your budget
According to the National Retail Federation, consumers planned to spend an average of $935.58 during the holidays.聽If you put more on your credit cards than you can pay off in full come January, resolve to wipe it out in 2017. Make a budget, and make debt payment one of the essential categories, along with food, housing, utilities, gas and other regular expenses.聽Figure out how much more than the minimum you can pay on your cards.
罢丑别听聽method is helpful for聽staying motivated. Here鈥檚 how it works: Pay off the credit card with the lowest balance as soon as possible, while paying the minimum on your other cards. When card No. 1 is paid off, move on to the next lowest balance. Continue this process until your cards are paid off. By tackling your debt systematically, you can celebrate small successes as you reach your debt-free goal.
Review your 2016 credit card statements
When you get your final聽聽of the year, go through it聽to see how you spent your money and which items are tax-deductible.聽Your credit card issuer may provide a downloadable annual statement, which usually breaks down spending by category so you can analyze it.
Compare your spending to the聽budget you鈥檝e made for 2017 to figure out聽where you can adjust to stay on聽track. Or find聽where you can聽cut back to put more money toward savings.
Get the right credit card
Now that you know where you spent your money last year, think about whether you鈥檙e using the right credit card. Review the benefits and rewards on your current credit cards. Are they relevant to your lifestyle?
Maybe you鈥檝e changed jobs and you鈥檙e driving more聽each week. In that case, consider a card with聽. Maybe you鈥檙e planning a big purchase and need a card with a long 0% APR period. Or maybe you want to聽聽for different kinds of rewards, so聽you can use them to your best advantage.
For example, the聽聽gives you 5% cash back in bonus categories that聽you register for each quarter. 罢丑别听聽gives you bonus points on dining and travel. Book travel through Chase Ultimate Rewards, and points can be worth聽25% more. Consider the cards you have and how you might add one to boost your rewards.
Speaking of bonus categories, don鈥檛 forget to opt in to 2017鈥檚 first-quarter categories to get your 5% cash back if you have this type of card. For the Chase Freedom庐, bonuses for聽聽are gas stations and local commuter travel. On Discover cards, the聽聽categories are gas, ground transportation and wholesale clubs.
Negotiate better credit card terms
Often, people鈥檚聽oldest credit card is also the card with the lowest credit limit and the highest APR, since they probably got it when they were fairly new to credit.
The age of your credit accounts counts for 15% of your credit score, so you want to hang onto any old cards you have. But if it鈥檚 really not the best card for you, call your credit card issuer and see if you can聽,聽lower your APR, or even convert the account to a better card. If you鈥檙e a good customer 鈥� you pay your bills on time and don鈥檛 go over your credit limit 鈥� your issuer will want to hold on to your business, which could work in your favor.
If you聽can negotiate better terms, it鈥檚聽a double win for your credit score: You keep聽your credit history intact while聽increasing your available聽credit.
Here鈥檚 to 2017 and getting the new year started right.
Ellen Cannon is a staff writer at NerdWallet, a personal finance website. Email:聽ecannon@nerdwallet.com. Twitter:聽.
This story originally appeared on .
