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Play Your Cards Right - Credit Cards That Is


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August 27, 2023

As everyone looks ahead to the latter half of 2023, people will ask what is the most significant change they can make in order to clean up their finances. The answer will almost always be, "play your cards right - your credit cards that is."

Whether someone pays off their credit card each month or if someone carries a balance, this is the best time to clean up the cards to play them right. There are a few ways this can be done:

Simplify your life to 1 or 2 credit cards for spending.

Most people use their preferred card for everyday spending and another for large purchases. This is ideal in order to avoid juggling multiple cards and due dates and balances. With a $35 late fee plus accrued interest on missed payments, this one change can really help financially.

Use the card with the best rewards program.

Unless someone likes carrying around wads of cash, most purchases are made with some sort of card. If a card is going to be swiped for any purchase, it only makes sense to get rewarded for doing so. The most basic card gives a 1% cash back in rewards, but most companies have upped the ante by offering 2% and some as high as 5% if you shop at certain stores.

If a card has a balance, figure out the interest rate and adjust if necessary.

According to the Federal Reserve G.19 Report, for the last 20 years, the average credit card interest rate on a credit card would bounce between 12-15%. With interest rates rising, today the average interest rate has exceeded 16% on an existing card and to make matters worse, the average interest rate for a card carrying a balance is over 18%. According to a LendingTree.com Survey, the average interest rate on a new credit card issued today is over 22%. Plan on paying off cards or consolidate to the lowest interest rate.

Keep unused credit cards open.

A huge percentage of a person's credit score is calculating their debt utilization. Using real numbers, if someone has a $5000 balance on one credit card with only $10,000 in total debt available, they are utilizing 50% of their debt capacity. The credit bureaus look on this poorly. However, that same person with only $5000 on one card but also has 5 Credit cards with $10,000 limits and no balance, then they look super responsible for only using 10% of their available debt. By closing unused credit cards, the debt utilization will jump up and significantly affect the credit score.

Small positive financial steps will eventually lead to big financial successes. Make these changes and then check out www.oxygenfinancial.com

If you would like to receive more information on making smart money moves for your future, be sure to contact us today!


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About the author

Brian Watson

Brian Watson

Vice President, Private CFO®

Brian is a true Atlanta native and graduated from Walton High School. He got his Bachelor's degree in Business from Samford University in Birmingham, AL and then his Master's degree from Beeson Divinity. He is blessed to be married to his best friend, Jen, and they have 4 amazing kids (age range 7-13). He is active in his community by serving as a deacon at Johnson Ferry Baptist Church and helps lead their Children's Worship Service called Kid's Church. He is a baseball and soccer coach each season through the Upward sports program and even serves on the board for his kid's school, East Cobb Christian School. And if there is ever any free time from all this, he likes to run with his dog or sit on the back deck with friends/family or just read a good book.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. Investor Disclosures: https://bit.ly/KF-Disclosures

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual. It is suggested that you consult your financial professional, attorney, or tax advisor with regard to your individual situation.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

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