Ask Karen Gibbs

Veteran business correspondent Karen Gibbs answers your personal money questions and addresses current topics that affect YOUR finances on a daily basis. Karen is the financial expert in your corner--no question is too basic or too small. Karen boils down the issues simply: here's what you need to know, and here's what you need to do. Send your money questions to and post your comments below.

Karen, my employer is offering early retirement packages.  What questions should I consider before taking the retirement option?

- So Close to 65, Annapolis


Lady with Gray hair

Dear So Close, give yourself a gold star for thinking ahead!  Many people are so focused on their vision of retirement that they overlook some basic steps to take before retiring.

What is your vision of retirement?  How do you plan to spend your time?  Do you plan to work part-time or start your own business?  Do you plan to travel and/or spend time with the grandchildren?

Have you estimated how much you may spend in your retirement?  This would be my first step.  Create a budget detailing your monthly expenses, recurring costs such as utilities, food, gas, etc.  Then calculate how much you may want to spend monthly on travel, the grandchildren, dining out and other entertainment.  Be generous with these estimates as it is better to have more money at the end of the month ...

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Karen, I have a couple of questions about credit.  What’s the difference between revolving and installment credit?  Do I need to use my credit card frequently to keep my credit score in good standing?

- Tanisha, Owings Mills

Credit cards

Great questions, Tanisha, showing you’re thinking smart about your money.

First, revolving credit is open-ended credit.  It renews itself as the debt is paid off.  For example, your Visa card is an example of revolving credit.  You may have a $1,000 credit limit on that card.  You charge $100 this month. Now you only have $900 credit left on that card.  When you pay that $100 owed your limit goes back up to $1,000.  Other examples of revolving credit cards are store brand credit cards and HELOCs or home equity lines of credit.

Installment loans, on the other hand, are finite loans, meaning they had a definite start and end point.  Your student loan, auto loan and even your mortgage (if you have on) are ...

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