When NOT Using Credit Cards Can Hurt You

Credit cards can lead to overspending and debt, which is why many people keep their plastic tucked away, collecting dust. While it seems counter-intuitive, not swiping your credit card could slow your progress toward home ownership or other big financial goals. When used with intention and responsibility, they can be a helpful financial tool! Here are a couple of ways not swiping your credit card might actually hurt more than help:

Struggling to Build Credit

A strong credit profile generates significant interest savings when going to finance a larger purchase like a home or car. Consumers don’t necessarily need to use their credit card frequently and carry a large balance to build good credit. By making on-time payments, paying at least the minimum balance over time, and keeping modest balances, consumers increase their score.

Struggling to Get a Mortgage or Car Loan

Since most Americans don’t have enough cash to purchase a car or home upfront, they typically need financing for this kind of purchase. Mortgage and auto lenders put a premium on credit history when making decisions about loans. If you have a good credit score, you will qualify for more attractive rates.

While using your credit card to build a good credit score, you can also take advantage of rewards that earn you travel points or cash back and comprehensive fraud protection. Understanding how to use credit cards with care and intention is something we would love to help you with! Building your credit score is important if you want to save and get better rates when applying for a loan, so we are here to answer any questions you may have that will help you reach your financial goals.

Stop by and see us or give us a call at 515-457-9533 in West Des Moines and 641-227-3161 in Baxter.