Take Control of Your Household Budget In The New Year

(ARA) - Sticking to a budget is one of the top resolutions Americans make after the holidays, but many people aren't sure how to start effectively managing their household finances. Wise credit card use is a key step toward achieving such a goal. Understanding a few important facts now will help you to avoid surprises and get back on track when holiday bills arrive in the New Year.

Understanding the terms of your credit card agreement will help you better manage your finances. Here are three things to remember:

1. Interest - The best way to avoid paying interest is to pay your full balance when the bill arrives. If that is more than you can handle, always try to pay more than the minimum - even if it's just a little bit more - to lower interest costs.

2. Payment - Late fees are a hazard you want to avoid, so it's best to get your payment out early. Take note of the due date as soon as the bill arrives; if you bank online, sign up for e-mail alerts that remind you when your payment is due. When sending your payment in the mail, seven days is the recommended time frame - even if the bill isn't due for a couple of weeks. You don't want a delay in mail delivery or a potentially damaged check to cause you payment penalties. If you can, try paying online or using your mobile banking service to save time.

3. Fees - If you need to take out a cash advance, be aware that by doing so you may incur a fee. Keep that in mind for advances and other common credit transactions like balance transfers, which can also trigger fees. If you don't take them into account, you might accidentally go over your credit limit, which may harm your credit.

Understanding how to take advantage of all the products and services offered by financial institutions is essential to maintaining financial health. To help customers better understand and manage their credit cards, Bank of America recently launched the Credit Card Clarity Commitment, an easy-to-read one-page summary of certain important account terms.

"We know that people want clear, straightforward information from their bank," says Bank of America Global Card Services president Ric Struthers. "Our goal is to communicate clearly and make it as simple and easy to understand as possible so that we can enable our customers to use credit wisely. Our business is linked to the success of our customers, and we will do everything we can to ensure they have the information they need in simple, clear and straightforward terms."

Take control of your budget in the new year. Pay attention to your credit card rates, fees and payment information and how these affect your household finances.

Courtesy of ARAcontent

Image: Salvatore Vuono / FreeDigitalPhotos.net

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