3 Signs That Your Credit Card Use is Out of Control
We all know that too much debt is a bad thing. And in particular, you don’t want to throw away thousands of dollars on interest or enter retirement burdened by debt.
On the other hand, credit cards can be useful tools at times, for many reasons. So how do you know that your credit card use has gotten out of control? These three signs say it all.
Your balances are growing. Maybe you needed to use your cards to cover a large expense in the past. But those balances should be shrinking over time as you pay them down. If your debt continues to grow, especially if you aren’t experiencing financial hardship otherwise, then you’re overusing your credit cards.
Your credit score has dropped. Using credit cards can help you to build a positive credit score over time. But if your balances get too high relative to the amount of credit extended to you, the opposite begins to happen. You start to look more like a risk, at least according to the credit bureaus’ algorithms. Your score will drop, and potentially impact your ability to obtain a mortgage or other important types of loans.
You frequently make impulse purchases. It’s just so easy to swipe a card, and it doesn’t feel as “real” as cash. And so your debt can quickly get out of control. If you log into your credit card account and see numerous small purchases on a daily basis, you’re probably engaging in too much impulse spending.
So what can you do to get your spending under control? Consider leaving your cards at home when you won’t be needing them. Or, make yourself go on a cash-only budget for all daily purchases. If your debt is truly out of control, it might be time to consolidate your card balances into one low-interest loan, and get that balance paid down.
If you need more help with budgeting and financial planning, let’s discuss these issues at your next appointment.
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In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution.
Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies.
Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.”
Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.