Freezing in the Heat? 7/28/22

Hello NFC Clients and Friends,

The Norman family spent the better part of the previous two weeks in Los Angeles, Santa Monica, driving Route 66, the Grand Canyon, and in Las Vegas, providing a sharp contrast to all that previous natural beauty. A prevailing theme as we re-acclimate this week to our home in North Carolina---- HEAT! As my children now know, there are many variations on this theme, all of which include a greater appreciation of laundry machines and showers. A special kind of heat was also felt by Lindy and I as we stroked a digital check for our eldest’s first semester of college (insert a dizzying array of emojis here).

Naturally, I found it the perfect opportunity to discuss the unFREEZING and reFREEZING I executed on all of our available credit. While this is more of a Phase 2 or Phase 3 of a Norman Financial Coaching Action Plan, I wanted to share an advanced level “hack” of your finances you might consider in the future.

First, the FREEZE. Well over a decade ago, I FROZE all of our credit. Why? So no one— even if my wife's or my identity is stolen— can perpetrate credit fraud on us. In fact, even if we want to open up a new line of credit (i.e. get another credit card, mortgage, student loan, etc.) we cannot, unless and until we UNFREEZE or “temporarily lift” the FREEZE. And that is exactly what I did today before reFREEZING our credit. All of this is free, and easily done online through the 3 national credit bureaus: Equifax, Experian, and TransUnion. Banks use these credit bureaus to pull your credit score and assess whether or not to: 1) give you the loan, credit card, or mortgage, and 2) determine the interest rate they will charge you for the privilege.

Second, why did I temporarily lift my FREEZE when it is so appallingly hot again today? I did so to permit Chase and Citibank to pull my credit score in order to grant my request to raise the credit limit on all three of the Normans’ credit cards: Southwest Visa, Chase Sapphire Preferred Visa, and Costco CitiBank Visa.* Why? To improve my “credit utilization rate” which in turn improves our credit score. Should Your Increase Your Credit Limit is a short piece with a 1:30 video highlighting 6 benefits to doing so.

To summarize: FREEZING your credit is highly recommended. Raising your credit limit to improve your credit score, on the other hand, does not make the Top 100 on a To Do List for building financial fitness. But, once you have established a solid core through consistent automated practice, there is nothing wrong with working on your beach muscles. It is the summer after all. And it is hot!

I hope all of you are well. I look forward to helping in any way I can on your path to financial freedom. Looking forward to our next chat, meeting, or email exchange.

Warmest Regards (too much?),

David

* A future newsletter will share 1) why we use these 3 credit cards, and 2) how we used them to “travel hack” our vacation— flying our family of 5 to Los Angeles, renting a minivan with unlimited miles for a week, and flying back from Las Vegas for FREE, using CC points. Please do not try at home unless you are debt free, and always pay your credit card balances on time and in full.

A candid camera shot my multi-talented wife caught of my daughters and me at Dodger Stadium in L.A. on day one of our western odyssey this summer.