Like many other resident physicians, I had credit card debt when I started working. I accumulated the bulk of it during my postgraduate days living in a high-cost-of-living area when I was 22, but I added to that amount when I had to pay for med school applications, secondary essay fees, and travel costs to interview. During my time in med school, I lived off student loans, but during the 3 months between my med school graduation and my first paycheck as a resident doctor, I had accumulated even more. I needed money to move to a different state, pay my first month’s rent, and cover things like food and gas while I was awaiting my first residency paycheck. I didn’t have a spouse to help and my parents, while loving, didn’t give me the money I needed either. Before I knew it, I had $10,000 in credit card debt. Fortunately, I was able to pay this off in a year a half after starting residency. Here’s how:
I realized I didn’t like being charged interest on money I’d already spent. My first temptation was to delay paying it off. I was only making around $60,000 per year as a resident so I didn’t have a lot of extra money to spare. I knew that my income would increase when I finished residency, so it seemed logical to just wait to pay it off when I got the income boost. That changed the minute I logged into my online bank account. I was shocked when I realized I was being charged $100/month in interest. When I looked further, I saw that the interest rate on my credit card was 12%. This meant that I was going to pay an extra $1,200 a year in interest until I paid off the debt. Seeing how much interest I was being charged motivated me to pay it off quickly, even while I was still in residency.
I decided to pay it off in less than 2 years. As most folks know, a resident’s salary is not very high. Paying off $10,000 in credit card debt when you’re only making $60,000 a year can be tough, but I made a decision to do it. I knew that if I delayed paying it off, each dollar I was paying in interest was less money I could use to invest and build my net worth. Although I could have dragged the payments out during my entire time in residency, I really wanted to pay it off sooner so I could have the freedom to invest more money. This motivated me. I made a goal to pay it off in 2 years. (One year would strain my budget too much but 2 years gave me a realistic goal I could look forward to).
I lived with a roommate to make extra monthly payments. As a resident, I knew I would be working a lot. Although I really wanted my own living space, I knew I wasn’t going to be home very often to enjoy it. I figured I might as well share the space with a co-worker and use the money I saved in rent to pay down my debt faster. So that’s what I did. I got a 2-bedroom 2 bathroom apartment for $1700 a month. My roommate split the rent, electricity, cable, and internet bills with me. Instead of paying almost $2000 a month for rent and utilities, I only had to pay half of that cost. Saving nearly $1000 a month in living expenses gave me extra room in my budget to not only pay down my credit card debt but to also save a little money in cash to start an emergency fund.
I set up automatic deductions to pay $500 each month. This seems aggressive but $500 was my number. I knew I wanted to pay this exact amount each month, but I also knew I couldn’t be trusted to make this payment of my own volition. Thus, I had 20% of my net pay go to an entirely different checking account, which I called my “wealth building account.” I set up a $500 deduction from this account to my credit card each month and let the remainder of the money build up in that account as my emergency fund. Because this money was deposited and deducted from an entirely different account, I never saw the money in my main account and thus didn’t miss it too much. I got used to living on the remaining 80% of my net pay. Doing this did make me feel more “broke” than some of my co-residents who had more disposable money to spend each month, but it made me feel good to know that I was paying down my credit card debt and building up my emergency fund at the same time.
I used money from my tax refund and the first stimulus checks to pay it off. When I was in my first year of residency, coronavirus hit. While this was devastating for many reasons, the silver lining of this occurring meant I got a stimulus check. I used most of the money I got from this stimulus check and my tax refund in early 2020 to make extra payments on my credit card debt. While many other folks went online shopping with their money, I was paying down my debt. When I got the second stimulus check, I was able to pay off the credit card debt completely. A goal I had set for 2 years, had been accomplished in 18 months. I was thrilled.
I was diligent about not accumulating more debt once the balance had been repaid. Making that final payment to my credit card felt great, but I’d be lying if I said it lasted forever. Ironically, I was very tempted to charge even more expenses on my credit card, especially when I wanted the newest iphone, newer clothes, or the ability to take more vacations with my friends. Many people argued that I could just charge the money on my credit card and pay it off when I became an attending, but I chose not to go that route. I hate debt and the more debt I had the less I could invest to grow my net worth. Plus, I didn’t want to set bad habits. As someone who blogs a lot about personal finance, I know that finance is more about changing behavior than being good at math. If I got into the habit of buying things that I couldn’t afford now, I would likely buy more than I needed, accumulate substantially more debt, and have a harder time being debt free as an attending. I wanted a different life.
What about you? Are you developing bad habits by purchasing things you can’t afford using debt or are you willing to do what it takes to pay down your debt quickly and start investing, even while you’re in training or making the median income? If I can be credit card debt free, so can you.
6 of My Best Financial Decisions
As young professionals looking to make 2021 better than 2020, some of the decisions you make can have a huge impact on your overall net worth and ability to achieve your financial goals. In case you’re not quite sure where to start, here are some of the best money decisions I’ve made that have had a positive influence on my finances.
1. Learning the basics of personal finance. Dedicating time to learning the basics of personal finance has paid off much more than I can even imagine. Learning the importance of spending less and saving more has helped me gain self-control, live below my means, and set up an emergency fund. Understanding the different retirement accounts and the need to invest money has put me on track to retire early and have a high net worth in the not-so-distant future.
2. Deciding to get out of debt. This decision was a life changer. Before I realized that becoming debt free was so important, I had a substantial amount of credit card debt, a car loan that I was paying the very minimum on, and enough student loans to make your head spin. Once I realized that having these monthly debt payments was drastically decreasing how much money I had left in my pocket each month and once I saw how much I was paying each month in interest on all of this debt, I decided to make a change. Less than 2 years later, I paid off the credit card debt and car loan. Because I paid off this debt, I had more money left over from each paycheck and was able to use that extra money as an emergency fund and contribute more to my retirement fund. If you, too, decided to get out of debt, I’m confident it will have a drastic improvement in your net worth as well.
3. Living with a roommate. To be honest, this was a tough decision for me to make. As a doctor who was in her late 20s and moving to a new city, I really wanted my own space. I had lived with roommates for almost a decade and wanted to have something of my own. Although I could certainly afford my own apartment, deciding to live with a roommate saved me so much money! I was able to spend $600 per month less on rent which amounts to savings of over $7,000 per year. With this extra $7,000, I was able to invest a substantial amount of money and pay off my credit card debt and car loan relatively quickly. Although there were times that I wanted to have my own place, learning to live with another person allowed me to decrease my debt and build my net worth much faster. Take time to consider if this is something that might work for you as well.
4. Setting up a spending plan. When I started learning about personal finance, many of the books I read mentioned the importance of having a monthly budget. Although I tried to have a budget, I felt it was too restrictive. I started to get anxious whenever I had to purchase even one thing that wasn’t in my budget. Because of this anxiety, I scrapped the budget and set up a less restrictive “spending plan.” In my spending plan, I had a certain percentage of my paycheck invested for retirement, another percentage that automatically went to a savings account to help me pay off debt and save up an emergency fund, and another chuck of money that went to checking account I used solely for paying bills. Any money that was left over after those allocations, I was free to spend how I saw fit. This allowed me to enjoy my life a little more without feeling so restricted. If you also find that budgets are hard to follow, consider setting up a spending plan.
5. Buying a slightly used car. As a young professional who needs reliable transportation, I needed a car. Although I was tempted to get a brand new car that looked nice and had all of the newest features, getting a new car was going to cost me a lot of money. Paying for a new car meant I would have to finance the car through the bank or car dealership which meant I would get into tens of thousands of dollars in debt and have a substantial car payment every month for the next 4-6 years. Although I could have afforded the payment, buying a slightly used car instead of a new one, was going to save me so much more money. Since buying a slight used car that was only 2.5 years old cost almost half as much, I was able to save a substantial amount of money each month and use that savings to invest, travel more, and save up for retirement. Buying the used car also added a dose of humility and reinforced the importance of living below my means. If you’re considering buying a new car, I’d encourage you to consider getting a slightly used car instead. The cost savings could be significant.
6. Contributing money to retirement early. As a young professional with a lot of uses for money from each check, I seriously contemplated not contributing towards retirement. I was in my later 20s at the time and thought “I’m many years, if not decades, away from retirement. Holding off for a few years probably won’t make that big of difference.” Thank God, I changed my mind. One of the most powerful indicators of how much money we make investing is time. The sooner we invest, the more money we make in interest and the sooner that money starts to make even more money for us in return. This concept of compound interest is key to the overall value of our investment portfolio and net worth. If a person starts investing in their late 20s vs their late 30s, the person who invested earlier will have exponentially more money and a drastically higher net worth because of compound interest. If you are on the fence about investing toward retirement, I’d encourage you to make the decision to start today.
Now that you’ve read about some of my best financial decision, think about some of the decisions you’ve made. Which decisions have had the largest impact on your net worth? What things could you change in the future?
5 Financial Moves to Make This Fall
As you continue to mature you may begin to think about money in a different way. Instead of viewing money as something you can use to buy the things you want, you may start to consider the opportunities that money affords you and start thinking of ways to accumulate more. Here are 5 things you should consider doing this fall to take your finances to the next level.
1. Start investing in the stock market. Whether you are in your early 20s and just got your first salaried job, or are about to reach your 10 year work anniversary, investing in the stock market is something everyone should consider doing at all stages of life. Many people have opportunities to invest in the stock market through their jobs via a 401K or 403b retirement plan. Some companies may even offer a retirement “match” to incentivize you to invest through these venues. You should make it a goal to invest at least 10% of your income in index funds through your 401K, 403b or IRA retirement plan. If you’re able, consider investing even more money into your Roth IRA or using some of the money you have left over each month to invest via apps Robinhood, Acorns, or Stash. Investing in the stock market by purchasing index funds through retirement plans or brokerage accounts will allow your money to make money (aka “interest”) and after awhile, that interest will begin to make even more money for you (aka “compound interest”). One of the best things you can do for your financial future is invest your money and let the magic of compound interest work in your favor.
2. Reconsider what car you drive. Another decision that can have a huge impact on your finances is what car you choose to drive and more importantly, how you choose to pay for it. Many people love to purchase brand new cars. They love the new car smell, updated features, and the peace-of-mind in knowing they have reliable transportation for many years to come. Despite these benefits, there are downsides to buying a new car. One of the main drawbacks of buying a new car is that it loses its value fairly quickly in the first few years. This means it will continue to depreciate (or lose value with time). Thus, you end up spending a lot of money and having pretty hefty car payments for many years on a car that will lose value. If you are trying to invest money for retirement, spend money on other things, or save money for future trips and vacations, having a $500 car payment for the next 5-6 years may preclude you from doing so.
Other people choose to lease cars. They like being able to drive a different car every few years and don’t want to pay the full price of a car that will lose value over time. However, the downside of leasing a car is that you will still have a monthly payment each month of several hundred dollars for the next 3-5 years. When your lease is finally up, you will have to give back the car, and take out a new lease with a new set of monthly payments so that you can continue to have transportation. The most sound decision to make is to pay cash for a slightly used car. Cars that are 2-4 years old tend to still be aesthetically appealing, reliable, and are more reasonably priced. Paying for a slightly used car in cash can also prevent you from having a big car payment each month. Because the car is cheaper, you can get a much smaller car loan with much smaller car payments that you can pay off quicker, even if you didn’t have all the cash you need to pay for the on day 1. My point? Car payments can be a rather large monthly bill, so reconsider what you drive and think of ways you can reduce this payment or prevent yourself from having the payment in the first place.
3. Prioritize paying off your credit card debt. Credit card debt can negatively impact your finances in numerous ways. It charges you extreme amounts of interest each month if you don’t pay back the money in a timely manner. Since many people are unable to pay back all the charges in one month, they keep accumulating interest, on top of what they already owe. By the time they finally pay off the credit card, they have paid hundreds if not thousands of extra dollars in interest payments. If you are spending money paying off credit card debt, and the interest you owe on that debt, that’s less money you have to invest. One of the best things you can do for you finances is make a plan to pay off your credit card debt as soon as possible and try to avoid accumulating more.
4. Think twice about your living situation. Buying a house is a major goal for many people, especially young families. The idea of having something of your own to build memories in is quite alluring. In contrast, living in a high-rise apartment is extremely attractive for many young professionals who live in the city, especially if they do not have children. The convenience of being able to walk to bars and restaurants and having short commutes to other forms of entertainment can be quite attractive. While there’s nothing inherently wrong with your desires about where to live, it’s important to remember that where you choose to live, and how much you decide to pay each month for housing, can have a big impact on your financial future. Be wary of buying a house that is too large or too expensive. Be wary of renting an apartment with rent that is too high. Housing is one of our largest expenses each month. How much you choose to pay for a mortgage or rent can have a big impact on how much money you are able to save, invest, and spend on other things in your life.
5. Set up automatic savings. One of the best things you can do to ensure you meet your financial goals is to set up automatic savings. This means having a set amount of your paycheck automatically sent to a different savings account. Ideally, this savings account would be separate from the checking account that the rest of your paycheck goes into. By having it automatically deposited into a separate account you essentially “pay yourself first” and protect yourself from spending the money you were supposed to be saving. Doing this will help you build your savings each month which will increase your net worth over time and allow you to save money for an emergency fund, upcoming vacations, and other large purchases like a home, wedding, or college fund for your children.
What do you think, which of these 5 financial moves do you plan to make this fall?
5 Things I learned After Paying Off My Credit Card Debt
1. It is much easier to get into debt than it is to get out of it. I racked up a significant amount of credit card debt during my years as a graduate student. I moved to a city I couldn’t afford, accepted a job that didn’t pay well, and used credit cards to make up the difference. Needless to say, I accumulated debt pretty quickly. It’s not like I was “balling out of control” taking fancy vacations or living some lavish lifestyle but the cost of basic expenses in a high-cost-of-living area took its toll. Although it was fairly easy to rack up this debt, I had to make some hard sacrifices to pay it back.
2. Paying off debt takes a lot of sacrifice and behavior change. I delayed paying off credit card debt when I got into medical school simply because I couldn’t work during that time and was already living on student loans. Once I graduated and started working as a physician, paying down that debt was one of my top priorities. The interest rate on my credit card was about 12% and although that’s great for a credit card, the longer I kept this debt the longer I was going to be paying at least 12% more for the things I purchased years ago. In order to pay it off as soon as possible, I literally threw money at this debt. Each month for the first 6 months I was a physician I had a chuck of money automatically sent to the credit union that issued my credit card. Every month I saw money that I could have spent on a nicer apartment or a fancy vacation go to pay back debt I had accumulated well over 6 years ago. I was jealous of my classmates who ate at restaurants all the time or were always traveling to nice places when I was essentially living like a broke college student trying to back this debt. Trust me, it was tough.
3. The temptation to avoid paying it off can be hard to resist. There were so many times where I’d want something (like a nice lamp for my apartment, a fancier bed spread, or a newer cellphone) and I realized that I could probably purchase those things easily if I didn’t have so much money going toward paying off my credit card. I contemplated delaying paying off the card by a few months in order to experience some gratification now. While doing so may not have totally derailed my financial goals, it would have created a dangerous habit that could cost me even more down the line: delaying debt repayment to purchase material things. I’m a firm believer that the habits, mindset, and discipline needed to pay down debt are the exact same traits needed to save, invest, and build your net worth. Delaying gratification is never easy, but learning to do so had such a positive impact on my finances and ability to build wealth.
4. The debt was costing me more than I realized. I decided to prioritize paying down my debt because I realized I was paying drastically more for things that I purchased years ago. In other words, the credit card company was charging me monthly interest of over 12% per year on the total balance of the card. The longer I delayed paying it off, the longer I would be paying interest. When I started learning more about personal finance, I realized the debt was costing me even more than extra interest payments. It was also delaying my ability to build wealth. Every dollar I was spending on this credit card debt, was a dollar that wasn’t going into retirement accounts to be invested in a way that actually earned me more money. Instead of EARNING 8% per year on money invested in retirement accounts, I was actually PAYING 12% more on debt. The sooner I paid off this credit card, the sooner I could get more money invested and start earning interest instead of paying it.
5. Paying down the debt improved my quality of life. Now that I’m credit card debt free, I’m so much happier. I no longer have a large chunk of money going toward a bill I accumulated years ago. Instead, I’m investing more money into retirement accounts and saving more money in my emergency fund. I’m also planning a couple international vacations that will be paid for in cash. To be able to live my life without relying on credit cards is such a freeing feeling. Plus, it took so much sacrifice to get it paid off that I literally never want to go back.
Credit Card 101: The Basics
Despite your established career and long list of accomplishments, there is one area that may need a little fine tuning…personal finance. While you may be getting along okay right now, you can do better. Here is a reminder of some credit card basics:
Try to get the lowest interest rate you can. A credit card allows you to borrow money, usually up to a certain limit. It can be convenient during times when you don’t have access to cash or need to quickly get yourself out of a financial bind. However, whenever you use credit cards to purchase things, the bank charges you a fee. This fee is called “interest” and the amount of interest you pay is deemed your “interest-rate.” The lower the interest rate, the less of a fee you pay to borrow the money and use the credit card. Since most people end up needing a credit card every now and then, banks typically give you a small window (up to 1 month) with which to pay back the money you charged to the card. If you pay back the money within that amount of time, then you are not charged an interest fee on the money you borrowed. Your goal is to get a card with the lowest interest rate you can so that in the event that you do use the credit card and are unable to pay off the full balance by the end of the billing cycle, you aren’t charged a huge fee.
Be wary of 0% interest rates. Now this advice may seem counter to what I just said, but hear me out. Oftentimes, when you first sign up for a credit card, banks will offer you a 0% interest rate for the first 6-18 months. This means that you can borrow money “interest free” for that amount of time. While this is a good deal if you plan to pay off your balance quickly, more often than not, it’s a trap. When college students, young professionals, and any adult in a financial bind realizes they can borrow money to purchase things now with no penalty for doing so, they tend to borrow more than they would have otherwise. Once the 6-18 month interest-free period ends, the interest rate often skyrockets to almost 20%, which can be a recipe for disaster for anyone seeking to get out of debt or build wealth in the near future. If you have one of these credit cards, you need to practice self-control to make sure you are not borrowing more than you can pay back.
Consider getting a credit card from a credit union instead of a commercial bank, if you can. Credit unions (like Navy Federal, USAA, etc) are nonprofit banking institutions. Because of that, they have several advantages over typical commercial banks (like Bank of America, Chase, Wells Fargo, etc). One advantage of credit unions is that they tend to charge lower interest rates on credit cards and bank loans. I can tell you from personal experience that the interest rate on the credit card I have from a credit union is DRASTICALLY lower than the interest rate on the credit card from a commercial bank. In fact, the interest rate is so much lower that I never even use the other credit card.
Another advantage of credit unions is that they usually have better customer service and are more forgiving when you make a mistake. When I first got a credit card in college I was terrible at keeping track of things. I would sometimes forget to pay off my credit card balance, not because I didn’t have the money, but simply because I forgot to do so. If I had made that mistake with a commercial bank they might have charged me a late fee for not paying my balance on time. However, since I was part of a credit union, I just called them and explained my oversight. They “forgave me” and removed the late fee EVERY. SINGLE. TIME.
You should know that you cannot just walk into a credit union and ask for a credit card. In order to receive services from a credit union and use them as one of your banks, you have to meet certain requirements in order to become a “member.” For example, some credit unions are only available for teachers and their families, another credit union may only serve members of the military and their families, and other credit unions may be strictly for hospital employees and their families. You just have to search for credit unions in your area, find one you are eligible for, and sign up.
Pay more than the minimum balance each month. When you charge money to a credit card, they usually don’t demand that you pay off the full balance right away. Oftentimes they only demand a small amount called a “minimum payment.” What they don’t tell you is that if you only pay the minimum payment each month, you will still be charged interest on the amount that’s left over. As a result, they will charge you even more money in interest and it will take you much longer to pay back the full amount. Moral of the story: pay more than the minimum payment and try to pay off the entire balance at the end of each billing cycle if you can.
Find out when your billing cycle ends each month. If you are going to be diligent about paying off your credit card balance each month or even just making sure you aren’t late on any payments, it is essential that you know when your billing cycle ends each month. Why is this important? Well because if you happen to use your credit card near the end of your billing cycle, then you must pay off the balance much sooner or else you will be charged interest on the amount you borrowed. For example, if your credit card interest rate is 14% and you purchase something for $100 on your credit card the day before your billing cycle ends, then you must pay back that $100 the same day or else the bank associated with your credit card will charge you an added fee of $14 and your bill will now be $114. I should note that most credit card companies will give you a grace period of about 25 days after you charge something, but not all credit card companies provide that benefit. Check to see if your credit card has a grace period and figure out when your billing cycle ends each month so you can coordinate your payments in a way that prevents you from paying interest.
Look at your statement each month. This may sound a little basic, but trust me it bodes reminding. If you have your credit card payment set up for automatic withdrawal from one of your checking accounts you may be tempted to occasionally forgo looking at your bank statements. Let me caution you against that. It is important to check your statement, even if you have very few charges, to make sure there are no errors. The people who process your statements are human and sometimes mistakes are made. You’ll never know they are there unless you check. Plus, sometimes you may be charged extra fees you are unaware of.
Check your FICO score periodically. Along with checking your statement, it is essential that you periodically check your credit score aka your FICO score. This score is a credit rating from 300-850 that determines how reliable you are as a borrower. The higher the score, the better. Your credit score is what is used to determine whether or not you qualify to rent an apartment on your own (without having your parents cosign for you). A higher score will also allow you to purchase a car or a home for a lower interest rate or fee. Check your FICO score periodically to get an idea of where you are at. Any score above 750 is pretty good, scores under that can use some work. Most credit card companies will give you a free estimate of your FICO score with each credit card statement.
Call the bank once a year to lower your interest rate. It is essential that you do what you can to lower the interest rate on your credit cards. Technically, your interest rate doesn’t matter as much if you pay off your credit card balance each month, but you want the interest rate to be low just in case. If there is one thing I’ve learned, it is that life can be unpredictable at times. We plan as best we can, but sometimes expenses can still catch us by surprise. Whether it’s a toothache that turns into an urgent dental procedure or an acute injury that turns into an expensive doctors appointment, you never know when you may need to use your credit card to cover an expense. Do your best to get the interest rate on your credit card as low as possible. While you may not be able to immediately alter the interest rate a credit card company starts you off with, you can however, ask for them to change the rate once you have had the card for awhile. In fact, I make a personal habit of calling my bank once a year to politely ask them to lower my credit card interest rate. Even with my status as a full-time medical student with no salaried income, they lower it EVERY. SINGLE. TIME. Some times we have not because we ask not. Call your bank and ask them to lower yours as well.
Avoid Cash Advances. When you get a credit card, they may offer you something called a “cash” advance. This means that you can get a certain amount of money in “cash” for a particular fee. The problem with this convenience is that it ends up costing you a lot of money. Many credit card companies charge you a higher interest rate to do a cash advance than they do to purchase something directly with the card. Plus, they usually have rules that prevent you from paying back this cash advance (that is costing you lots of money) until after you have completely paid off your credit card balance. This means that you could easily fall into the trap of being stuck paying a super high fee for the cash advance for much longer than you would have liked. The bank profits a lot, which is why they offer it, but you end up paying a lot more than you may have anticipated which is why it’s best to avoid that option if you can.
Consider using credit cards for points and free perks. If you are at the point where you consistently pay off your credit card balance in full each month, then you may want to consider something else: using credit cards for points and perks. Many rewards credit cards from companies like American Express, Chase, Citi bank, Capitol One, and Bilt allow you accumulate credit card points from normal purchases that you can transfer to airline and hotel loyalty programs for tremendous value. For example, I was able to accumulate points and transfer them to the Virgin Atlantic airline (a Skymiles partner of Delta) and get a first class flight to South Africa on points. Many other people transfer points to hotel and resort chains to get free stays at international resorts and Caribbean vacations. Recognize that although using these travel rewards cards can result in huge perks, they can also be a huge risk and financial catastrophe for anyone who doesn’t pay their credit card balance in full each month.
To summarize, if you are like most people, you probably didn’t take a personal finance class in school. No worries. I’m here to help you learn the basics, especially when it comes to credits cards. When you first get a credit card, try to get one with the lowest interest rate you can (that way you won’t be charged as much money when you use it). However, be careful when you get 0% interest credit cards, because the interest rate tends to skyrocket to almost 20% after a certain time period which can get you into trouble if you aren’t careful. If you can, try to get a credit card from a credit union instead of a commercial bank. Chances are the interest rate will be lower and the customer service is usually better. When you use your credit card, try to pay more than minimum balance each month. Find out when your billing cycle ends each month so that you can pay off your balance before the added interest payment hits. Also, don’t forget to check your bank statement each month (to make sure there are no false charges or hidden fees) and look at your FICO credit score periodically since your FICO score is what apartment buildings will look at to see if you can get an apartment without needing someone to cosign or buy a home without paying a high interest rate. Be aware that you can call your bank once a year to get your credit card interest rate lowered. Lastly, try to avoid cash advances if you can and consider using credit cards for perks and rewards if you are someone who pays off your balance in full each month.