How to Use Tulsa Credit Cards Responsibly

Phil Mulkins, Action Line editor for the Tulsa World, described paying only the monthly minimum on a credit card bill as “the road to financial ruin” in a recent column.

Mulkins posed the following example: If Tulsa credit cards accumulate 18 percent interest on a balance of $1,500, a monthly payment of $37 could end up costing a borrower $1,792.52 — as opposed to only $555.70 accrued by paying $47 a month.

With the help of Mitch Korolewicz, an AFC financial counselor with OK Money Coach, a Tulsa financial counseling and planning firm, you can learn more great tips about responsible credit card use in Tulsa.

Applying these tips to future Tulsa credit card offers will increase your chances of carrying one of the best credit cards in Tulsa:

Tips to Use Credit Cards Responsibly

1. Understand the credit card’s terms.

Always thoroughly review Tulsa credit card offers. Look to the initial application and monthly statements to learn the card’s grace period as well as associated fees and penalties. Additionally, brief yourself on what might trigger a rate increase.

2. Figure out if you need the card, or if you just want it.

“Use credit cards for needs, not wants,” Korolewicz explained. “Using credit cards for wants can lead to overspending and getting into debt.”

3. Write down your credit card purchases.

“To avoid debt in general, track your spending habits for a month,” Korolewicz advised. “There are many good apps that will help you do this, like Cash Trails [and]  Hello Wallet.” The old-fashioned pen-and-paper route will do just fine, too.

Tips to Avoiding Undue Interest Charges and Debt

1. Add to your monthly payment.

“To reduce credit card debt and accruing charges, pay more than the minimum amount due each month,” Korolewicz said. As little as $10 to $15 on top of the minimum payment can reduce credit card debt by 13 years.

2. Don’t exceed your credit limit.

Exceeding your credit limit can be costly. “Over-the-limit fees can be as high as $29,” Korolewicz explained. These fees are completely avoidable, as long as you keep track of your balance with online tools.

3. Pay on time.

Paying on time avoids late fees and prevents a credit score drop of 100 points. Payment history contributes to 35 percent of someone’s FICO score. Customers might qualify for a lower interest rate if they have a history of paying promptly.

4. Don’t carry more than 30 percent.

If you have to maintain a balance, Korolewicz recommends carrying over no more than 30 percent of your bill. Along with negatively impacting your credit score, the credit card companies can justify interest rate hikes if you use too much available credit.   

Photo credit: StormKatt