Boost Your Credit Card IQ | Guiding You Forward

As credit card debt continues to rise, more people are seeking advice for payoff strategies and financial maintenance tips that can be sustained over time. While many advocate for cash transactions as a safer alternative, it's crucial to be aware of the significant advantages that responsible credit card usage can offer. With well over a decade of experience in the finance industry, Jonathan Brouse, vice president of direct consumer lending at Mountain America Credit Union, joins us in the podcast studio to talk about the importance of making smart choices when it comes to using credit.

In this episode, you’ll learn:

• Two ways to utilize a credit card.
• Why credit is so important to your overall financial picture.

• How to choose the best credit card for your situation.

A credit card serves dual purposes as part of your personal finance plan. Primarily, it functions as a convenient payment tool, allowing you to make purchases without carrying cash. It makes shopping seamless when you swipe, tap or enter your details online. However, a credit card is also a powerful borrowing tool. If you don't pay off your balance in full each month, the remaining amount becomes a loan, with interest accruing over time. This feature provides financial flexibility, letting you spread large expenses over several months but, as Jonathan emphasizes, it's crucial to understand the interest rates and repayment terms to avoid accumulating costly debt.

Credit is more than just a means to make purchases—it's a powerful tool that can significantly impact your financial well-being. Jonathan discusses how building a strong credit history demonstrates your reliability in repaying debts, which lenders view favorably. This positive reputation can unlock access to loans and credit cards with lower interest rates, meaning you'll pay less in finance charges over time. Therefore, managing credit responsibly isn't just about immediate buying power—it's a strategic move that can lead to substantial savings in the future.

In a market flooded with credit card offers promising enticing rewards and benefits, choosing the right card for your situation can be overwhelming. Card issuers offer many different promotions to attract new customers. While these offers can provide substantial benefits, they often come with hidden costs like annual fees or high interest rates after the promotional period. Jonathan advises to look beyond the flashy promotions and carefully assess each card's terms. Focus on those that align with your spending habits and financial goals and pay off balances promptly to maximize rewards without falling into a debt trap.

Watch the full podcast video to get more insight from our expert on how to best use credit cards.