UMN Expert: Financial literacy for families
Every year families can look to improve at managing their money, especially as it pertains to credit card usage.
Sharon Powell, an Extension Educator with the U of M’s Family Resiliency Team based at the Urban Research and Outreach-Engagement Center (UROC), is available for comment on the importance of financial literacy, and can offer best practices for anyone navigating today’s landscape on a budget.
Fortunately, Powell believes strategies for achieving and maintaining good credit are easier than people think.
“Our credit system can be confusing, but it’s so important that people understand things like what it means to have good credit and how to improve your credit score.”
“Making one small purchase a month on a credit card and paying it off promptly is a great way to build better credit safely without incurring interest or going into debt. I also tell people to be sure to check their credit reports, because about 25 percent of the time, those reports include mistakes and you have to be the one to point them out and ask credit bureaus to remove them.”
“People often feel defensive because in the U.S., we are prone to finger wagging about being short on money, as if it is a character flaw. I can tell you that most of the families I work with are good money managers. They’re just stretched for money because there isn’t enough money. That’s the problem.”
Sharon Powell is an Extension Educator with the Family Resiliency Team at the University of Minnesota. She educates low-income individuals and families on how to build money-management skills to improve their financial situations, and families at all income levels improve their relationships, particularly parents and children.
Tips on Making Credit Cards Work for You
- Always pay your bill on time to maintain good credit and avoid late fees, as well as penalty interest rates that could be applied to your account.
- Keep track of what you are spending so that you always stay below your credit limit. Going over your limit may result in credit card companies charging additional fees and/or increasing your interest rate.
- Pay more than the minimum amount when possible to reduce the amount of interest you will pay over time. Better still, pay your balance in full each month to avoid paying interest.
- To build and/or repair credit, consider getting a secured credit card where you deposit a certain amount that becomes your credit line. For example, you deposit $500 and then can charge up to $500.
- Compare fees, charges, interest rates and benefits before choosing a credit card. Some cards might look like a great deal, but the terms and conditions may reveal that they are not.
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