We’re all feeling the pain as inflation raises prices across the country and in just about every facet of our lives. From the grocery store to the gas pumps, the car lot to our home electricity prices, we’re seeing inflation make things increasingly more expensive at the highest rate in 40 years.
Ouch. The strain on our monthly budgets is real.
So, how can you help fight inflation and manage your money a little better these days?
Of course, you can try to conserve, cut back, and pinch pennies. But we’re not talking about rampant inflation on just luxury goods or non-necessities like smartphones and designer jeans. Our wildfire of inflation is increasing the prices of core goods and services that we all need to survive – especially the price tag when you check out at the grocery store.
But I’m here to deliver the good news that one vital strategy to combat inflation and rising prices is to make sure you maintain a great credit score.
Keeping a great credit score will allow you to pay the lowest possible interest, cost, or fee for the big-ticket items in our lives, like credit cards, installment loans, personal loans, student loans, auto loans, and mortgages. A bad (or good) credit score can even affect our insurance premiums and more.
And by making sure your credit score is top notch (above 730 or so is usually considered a great score) will allow you to pay the lowest possible interest on your important, frequent, and sizable purchases or monthly payments.
That’s right – many of us make these everyday purchases on credit cards, which means we’re paying a 5%, 10%, or even 20% premium on the money we spend in the form of interest (to our credit card companies). And if we’re paying only the minimum payment, the true cost of our purchases balloons to ridiculous proportions.
Think about the cost of a $2,500 credit card balance that was used to buy regular necessities and sundries: groceries, gasoline, school costs, clothes for the kids, a new phone, etc.
At an 18% APR and paying only the minimum payment on that credit card, you’d be paying approximately $5,896.48 in interest over a mind-boggling period of more than 20 years. The true cost of that $2,500 bill would be closer to $8,396.48!
Now, with a low interest rate, you could clip thousands of dollars off of that true cost – even cutting it in half. (And, of course, we encourage paying more than just the minimum, which makes a huge difference.)
Now, if you were able to pay the lowest available interest rates across all of your credit cards, your auto loan, your student loans, and your mortgage, your total monthly outflow would be significantly lower.
And these are big-ticket items where a great credit score/low interest rates make an impact – not just a dollar more for a tank of gas or $30 extra on your grocery bill. Lowering interest rates even a little on balances that sit in the thousands, tens of thousands (cars and student loans), or hundreds of thousands (mortgage) totally transforms your budget for the better.
In fact, it’s now estimated that those with just a mediocre (somewhere in the mid 600s) credit score will spend an additional $45,283 in interest over the course of their life!
Think about your budget as a whole – total monthly outflow. That not only includes the cost you pay for things (food, gas, electric bill, etc.), but the money you borrow to pay for those things.
And that’s where keeping a great credit score can help shave hundreds or even thousands of dollars off your monthly outflow, allowing you to effectively absorb the pain of inflation without flinching.
Now the fun part – increasing that credit score. Thankfully, Blue Water Credit is here to help. As the industry leader in legal, ethical, and highly effective credit repair, we’re ready to roll up our sleeves and help you boost your credit score – and start saving money, beating inflation.
Just give us a call or drop us an email for more information!
If you need any advice or even help improving your credit score, just contact Blue Water Credit!