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3 Good Reasons to Break Up With Your Credit Card

By U.S. News & World Report

Summertime is wedding season, which can provide ample opportunities to reflect on our personal relationships. But now is also a good time to take another look at your relationship with your financial products — especially your credit card.

As with finding a mate, picking the right credit card is all about chemistry. Most of us kiss a few frogs before we find the right one, but don’t let a mismatch hang around for too long. You don’t want to lose time you could be spending with a better fit. Here are three surefire signs you and your plastic should call it quits.

1. You’re not using it, and it’s charging an annual fee.

Paying an annual fee on a credit card only makes sense if you’re earning enough in rewards to outweigh the fee. For example, let’s say you have a credit card that earns 2 percent on every purchase and charges an annual fee of $95. You’d have to spend $4,750 per year on the card just to break even. Otherwise, that annual fee is money down the drain.

Keeping a credit card open and active to preserve your credit score is generally a smart move, but only if it’s earning enough points or miles to justify the cost of keeping it around. The good news is that canceling an unused credit card likely won’t do serious damage to your score, as long as you have an otherwise healthy and diverse credit history and follow these tips:

— Pay off balances on other cards before you cancel the old one. This move will keep your credit utilization ratio (the amount you owe on your cards compared to the cards’ limits) from shooting up when you lose the available credit from your old plastic.

— Keep at least one credit card open at all times. Although your canceled card won’t drop off your credit report immediately (if you have positive history with it, it could remain for up to 10 years), it’s wise to keep at least one open and active revolving account in your credit profile.

— Make on-time and in-full payments on all your other accounts.

2. Its rewards program is no longer useful to you.

When you picked your credit card, its rewards program might have been a key consideration. Perhaps it provides extra points or miles on dining out and travel, which were two of your biggest spending categories when you applied for it. If they still are, feel free to keep swiping. But if your lifestyle has changed over the years, it might be time to move on to another card that offers a rewards program that fits your spending habits better.

Another possibility is that you chose your card because you thought you’d get good use out of its rewards. If, for example, you got a travel credit card because you wanted to become more of a globetrotter, but you can’t seem to make the goal happen, switching to a cash-back card is probably a smart move.

3. You can’t control your spending.

The average American household has $7,400 in credit card debt as of June 2015, according to a NerdWallet analysis. Although it’s possible that some of this comes from unexpected expenses, studies from behavioral economics indicate that people spend more with credit cards than they otherwise would with cash. In some cases, kicking a credit card to the curb and replacing it with cash or debit might be a wise choice so that you’re able to meet other financial goals.

Swearing off credit cards altogether is a big deal, because you’ll miss out on the ability to build credit and earn rewards. Before you take the leap, experiment with different budgeting and spending strategies to see whether they can help you get a handle on your outflow. If nothing works, and cutting up the cards is the only option, be sure to pay them all in full first. Then use the money you’re saving to invest or pay off other debts to make the move away from plastic worthwhile.

More from U.S. News

12 Habits to Help You Take Control of Your Credit

8 Ways to Maximize Your Credit Card Rewards

10 Ideas for Dating on a Budget

3 Good Reasons to Break Up With Your Credit Card originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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