BOSTON (CBS) – More of the tips or pitfalls on credit from The National Foundation for Credit Counseling.

Automatic bill paying –

  • Tip:  Arranging for your payments to be sent to creditors before the due date means you’ll never pay a late fee or have a dinged credit report.
  • Pitfall:  If you neglect to balance your checkbook and the automatic payment results in an overdraft, you’ve defeated the purpose.
  • Dee: Many consumers do not balance their checkbooks each month. You need to do that and you can use software like Quicken to help you keep track of your expenses.

I use my credit card for many of our monthly bills like the cable and phone. They get paid on time and I get the points plus the float. You can keep a running total in your checkbook so you know what to expect on the credit card bill.

It’s also a good idea to check your credit card balance and check book balance on line during the month.

Co-signing on a loan –

  • Tip:  You can help another person establish credit, rebuild credit, or purchase something beyond what they could on their own credit worthiness.
  • Pitfall:  The co-signer and primary borrower are equally responsible for payment of the loan.  As well-meaning as people are, things happen.  Never co-sign on a loan unless you can afford to solely take over the payments.
  • Dee: Oh so true. I usually recommend that you never co-sign on a loan or a credit card unless you have the money to gift or to give to the borrower outright.

Especially if it’s a relative, such as your kid or a sibling. Often they do not take it very seriously when they are late on a loan payment because they have you as a backup.

The NFCC further states, “Consumers should thoroughly research and fully understand the risks and benefits to any financial decision. Simply because an offer sounds appealing, doesn’t mean it is.”

Remember there are pros and cons to every financial decision we make!


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