TEMPLE, Texas — Ladies and gentlemen, credit-card spending in America is on the rise. In the third quarter of 2023, credit-card spending was up over 18%, according to Fortune magazine.
In an all new Money Talks, our part one of our two part series on credit cards, and why in many cases they are good for you and can actually protect you at times of fraud.
If you can't afford your current lifestyle and end up maxing out, one, two, three or more credit cards, we all know you are playing with financial fire. However, if used responsibly, your cost of borrowing money can improve!
Certified Financial Planner Neil Vannoy explains to 6 News, "Keep in mind that using credit cards will affect your credit score, and that might affect your ability to get a car loan or a mortgage. Having credit cards can be a good to help you build and maintain credit if you use them responsibly, but charging a large balance and carrying a large balance can bring down your credit score."
Neil Vannoy has told us over and over that swiping the plastic is just too easy, so we'll spend more, saying, "Studies have shown that people tend to spend less when they pay for purchases with cash as opposed to using credit, so make sure that using credit cards for rewards doesn't cause you to increase your spending beyond what you can afford."
Keeping a zero balance each month and using the advantages that credit cards provide is really the best way to go! Neil says, "Many credit cards offer benefits like fraud protection, extended warranty coverage, and other benefits that can make using them a better option than using cash."
And weigh your options, if the restaurant you are at charges a 3 percent fee to use a card, but that card gives you 2 percent cash back, that is not a win! Neil told 6 News, "Keep in mind that a lot of businesses offer discounts for using cash – especially restaurants – so weigh these discounts against any bonus you get from your credit cards."
Neil also says sites like nerdwallet.com, wallethub.com, and thepointsguy.com can help you find the best credit card for your specific needs.
Next week we will feature part two on credit cards as we talk about which rewards are better; cash back or airline miles. That will be next Thursday Jan. 18 at 10 p.m.
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