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The new year brings new opportunities to reap the rewards of smart credit card spending. Whether you’re aiming to earn some extra airline miles, score some free nights at your favorite hotel chain or see some cash back land in your checking account, the first step toward those benefits is making sure that you’re hitting a home run with your credit score. Here are five simple tasks to help you gauge the health of your credit and improve it for a successful 2017.
1. Check your score
If you’re like the majority of Americans, you lack one essential piece of knowledge: your FICO score. A 2015 LendingTree survey revealed that nearly 60% of American adults are clueless when it comes to their credit scores. If you’re in this category, the beginning of 2017 is the time to empower yourself with knowledge. Discover will let everyone — even if they aren’t customers — check their credit scores for free.
2. Give yourself a personal assessment
Credit agencies offer a well-rounded perspective of how outsiders see you, but it’s equally important to look inside yourself. Think about your personal spending habits. Have you been making minimum payments? Carrying a big balance from month to month? Simply put, would your mother be disappointed in you? Be honest with yourself about how you’re managing your money. Make 2017 the year you rein in expenses to avoid paying any unnecessary late fees or interest charges.
3. Get organized
You don’t have to rely solely on yourself to manage your money. Log in to your online banking folder to browse the free tools that can help you stay on track toward financial fitness in 2017. Set up payment reminders, or enroll in auto pay. Since your payment history makes up approximately 35% of your credit score, being on time should be at the top of your list.
4. Review your current card portfolio
In most cases, I do not advocate closing any of your credit cards. If you’re in good standing with each of them, they all help strengthen your credit history. However, there are some occasions when it might make sense to close a credit card. For example, if you used to travel all the time for work, a hotel-branded credit card may have helped you score some free vacations. If you’ve switched jobs and stay at home most of the year, you may not be able to justify the card’s annual fee anymore. However, be sure to take these five important steps before you close a credit card.
5. Consider requesting a credit limit increase
If your assessment reveals that you’re doing an A+ job with your money, take a look to see when your bank last increased your credit. A higher credit limit will strengthen your credit utilization ratio and your overall credit score. However, note that asking for an increase may trigger a hard pull on your credit report, which could lead to a short-term dip in your score.
Thinking about opening a new credit card in the new year? Check out the top travel reward credit card offers for January 2017.
Featured image courtesy of AndreyPopov via Getty Images.
With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for travel through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel.
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards