How To

Using Credit Wisely: Mint’s Personal Finance Roundup

photo: AMagill

Credit is one of those things that can be easily misused and, not surprisingly, it played a huge part in the recent financial crisis. But while credit cards and personal loans in the wrong hands can set the stage for ballooning debt, if used wisely, they can help you simplify your finances, build your credit and even yield you some savings.

By managing your finances well, paying your bills on time and avoiding late payments, you’re much more likely to qualify for new credit and obtain loans at much lower rates. Budgeting tool, like Mint.com, can help you track your finances more carefully.

This week’s roundup includes articles on how to use credit wisely and to your advantage.

When Credit Cards Come to the Rescue – This U.S. News blog post outlines one reason why people keep credit cards: for those occasional mini-emergencies that may come their way. It discusses the appropriate ways to use a credit card and clarifies how cards should be used in times of emergencies. Vacations, for example, are not “emergencies.” Have you been maxing out your card? Maybe it’s time that you take control over your credit card debt and spending.

Your Credit Card is Not an Emergency Fund – Continuing on this topic, this article by Financial Highway may finally convince you to start building your emergency fund. Yes, your credit cards will be there for you at all times, ready to be a safety net before you hit a financial ditch. But to make sure you don’t get to this point, you should have a cash savings account to cover your short-term needs. That way, you’ll be prepared for dire financial situations caused by illness of job loss. Avoid falling into the habit of perpetually using a credit card for your emergencies and instead, create a cash safety net for yourself today.

Yet Another Reason To Order Your Credit Report – Our credit reports help us monitor our financial health and debts. But Donna Freedman gives us another reason to order a credit report: when you’re about to start looking for a new job. Potential employers may be checking up your background, and that includes your credit report. Are you anticipating a layoff? Or are you looking at a career change? Consider reviewing your report before going out on the job market.

How To Get Free Credit Monitoring – While we’re on the subject of credit monitoring, here are more tips from The Digerati Life on how to get your credit report for free. Explore the free trials before you pay for a credit monitoring service. If you’re resourceful, you may be able to pick up some free credit reports under certain circumstances.

A Brief Look at Obama’s Student Loan Overhaul – Some Americans are in deep debt today because of sky-high college tuition fees. All Financial Matters makes some interesting points by declaring that the real solution to student loans is not to make it easier to pay them off; rather, the best solution should be to make college tuition more affordable.

A 30-year Fixed Rate Mortgage Is Protection – When you’re ready to buy a house, you may wonder whether you should get a fixed-rate mortgage or an adjustable-rate mortgage. While a fixed-rate mortgage can be more expensive for you to obtain up front than a variable rate loan with the same terms, it offers the benefit of inflation protection. In the long run, a fixed rate mortgage gives you some peace of mind over your payments, given the predictable payment schedule.

Getting a Loan to Pay Off Debt - Getting a new loan to pay off your existing debt isn’t always a good idea, but in certain situation it can help you save money. There are several types of loans, for example, that you can use to consolidate high interest debts.

In hard financial times or in good, we should strive to make wise financial decisions. Don’t let your credit use rule you. Instead, with discipline and wisdom, use credit to your advantage.

Silicon Valley Blogger (SVB) runs The Digerati Life and The Smarter Wallet, where she writes about  general personal finance topics such as investing, budgeting, debt management and small business ideas.