But I'm worried about your financial blind spots—those pesky threats to your security that lurk behind seemingly sound decisions. Here are a few common traps, and advice to ensure that you won't get taken by surprise:
The Perils Of Plastic
The Good News: You've sworn off credit cards. Goodbye insane interest rates and fees! You're sticking with your debit card from now on.
The Hidden Risk: Debit card transactions aren't reported to the credit bureaus, so if you don't use a credit card, you'll have less of a payment history—which hurts your FICO credit score.
How To Stay On Top: I love, love, love that you want to use your debit card. But to keep your credit score solid, you still need to keep a few credit cards and use them at least once every few months. Even if you think you'll never need to borrow again, your FICO credit score has a big impact. It can affect your auto insurance premium and whether a landlord will rent to you, and many employers even check it when vetting a job application. Cards issued by credit unions typically charge lower rates (generally limited to a max of 18 percent) and fewer fees. Check out CreditCardConnection.org to find the best options.
What to do about bonds and retirement funds