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Is your financial health in check?

April 29, 2011

The majority of today’s consumers have a skewed view on credit and how credit works. As convenient as credit cards and loans may seem, there truly are only a few reasons as to why people should be using credit.


1) Using credit to create wealth: Credit is beneficial when used to leverage your assets in order to create wealth. There is nothing wrong with borrowing money to make you even more money.

2) It’s all about balance: If you have the cash in the bank to pay off your balance right away, it is ok to buy something you need with credit. As long as you actually pay it off right away of course.

3) Incentives: Using a credit card in lieu of cash when there are Air Miles, points or other rewarding incentives is a good way to maximize the bonuses you receive with your credit card.

4) Appreciating vs. Depreciating: Loans, such as secured line of credits or mortgages, are key when acquiring an appreciating asset, like real estate. A licensed Mortgage Agent can ensure you have the best strategy to pay down your mortgage debt faster and put more money in your pocket.


1) : It is not advisable to use credit to fill the gaps between lifestyle and your income. This is where credit card companies make the most money. Preying on consumers that purchase lifestyle items with credit but do not always have the means to pay their balance off.

2) Time to shop?: Just because you have an available balance on your credit card, it does not mean that you have to spend it! Work towards lowering your balances with on-time monthly payments, rather than increasing your balance with unnecessary purchases.

3) Long-term payment schedules: If you can’t pay the balance off in a month or two, it is not a good idea to continue spending and using credit. Paying off your balance faster only helps in bettering your credit score, which will aid in larger loan transactions, such as obtaining a great rate on your next mortgage.

4) Large limits: In addition to the previous point, paying down your credit card balance will feel close to impossible if you have limits on your credit cards that you don’t have the ability to pay off. Before agreeing to an increase in your credit limit from your credit card company, make sure you have the ability to pay of your limit if you ever find yourself in that situation. This will help to prevent delinquent payments and help you maintain good status on your credit bureau (i.e., keep a good credit score).

If you find yourself doing more DONT’s than DOs, remember you are just a phone call away from getting your financial health back on track.