Financial Security

Don’t have “too many credit cards.” There are many good reasons to have at least two credit cards, but many people collect a stack of cards, including those from stores and oil companies, and rarely use them.

One problem with having a lot of credit cards is that lenders look at the ones with no existing balance or a very low balance and conclude that you have the potential to use them and get into debt. Even if you’ve proven in the past to be a responsible user of credit, these “extra” cards could come back to haunt you the next time you apply for a mortgage or other loan.

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Pay the entire balance on your credit card, or at least as much as you can to avoid or minimize interest charges. These charges can add up significantly.

“If you pay only the minimum amount due on your credit card, you may end up paying more in interest charges than what the item cost you to begin with,” said Janet Kincaid, FDIC Senior Consumer Affairs Officer.

For example: If you pay only the minimum payment due on a $1,000 computer, we’ll say it’s about $20 a month, your total cost at an Annual Percentage Rate of more than 18 percent can be close to $3,000, and it will take you nearly 19 years to pay it off.