Are credit cards a good thing? Or a bad thing??

Credit cards can be an effective financial tool to creating, building, and sustaining income and wealth. Of course, there are pros and cons to every financial opportunity but if an individual or organization can leverage their allotted credit limit that is suitable for their financial situation there can be an immediate increase of cash! Now, what is done with the increased amount of cash is another story.

General, more talked about, information is the known principle of keeping your spending rate less than 30% of credit limit per credit card.

Behind the Market. More than 30% pay down their credit card balances only to make charges soon after. This is a no-no. It is best if the individual or organization can pay off the credit card balance until they have saved, in cash, the exact amount of the possible credit limit.

With the Market. Using your personal credit card or your organization's credit card at the beginning of the billing cycle but paying less than 100% of the charged balance will allow increased use of cash. Financial diligence is needed to remain liquid and financially positioned to partially cover the billing cycle's charges.

Ahead of the Market. Paying off the entire credit card balance before the end of each billing cycle creates a good track record for you and tells creditors great things about your financial practices. You are able to pay what you borrow! Chances are when you need funds you will have immediate access to your credit limit and the credit limit (ceiling) may also be increased! It's a "win-win" situation. If/when your credit limit is increased, you will be able to increase your 30% credit spending rate for the particular credit card(s). This is a tough strategy but very much worth it. The last key piece is to replenish the credit limit amount or do not make any future charges until you have the equal amount of your credit limit in cash.

Having credit cards (or credit) is about having leverage. Increasing your savings accounts even by minimal amounts will help you "retain your earnings" while you leverage for a better financial position to make asset purchases, pay expenses, and invest.

---

Meet Nikia Smith, Director of Project Management Office (PMO), driving success at Business and Wealth Generations. With over a decade of advisory expertise, Nikia orchestrates strategy and operations, spearheading growth and innovation. Beyond his professional endeavors, Nikia actively participates in his community, having served on the Board of Directors at the Project Management Institute Florida Suncoast Chapter in different roles for several years. Recognized for his contributions, he received the PMI Florida Suncoast Chapter Award in 2018 for significantly boosting membership and retention and was also selected to attend the 2019 PMI North America Leadership Institute Meeting in Philadelphia. Nikia holds a bachelor’s degree in management and organizational leadership with a focus on Project Management, alongside several business certificates from St. Petersburg College. He is also certified in CAPM and PMP by the prestigious Project Management Institute. For collaboration opportunities, reach out to Nikia at info@thebusinesswg.com.