Final answer:
BDs should advise customers on managing Free Credit Balances by paying bills on time and not overutilizing's credit. They should also educate customers on the benefits of paying off credit card balances quickly to avoid high-interest charges. Moreover, those using credit cards for rewards should be counselled on efficient spending to maximize rewards.
Step-by-step explanation:
Broker-dealers (BDs) should indeed advise customers about Free Credit Balances. A Free Credit Balance refers to the amount of cash that is available in a customer's brokerage account and can be withdrawn or used to purchase securities without creating a margin debit. Improving the management of these balances can be achieved by paying all bills on time, and being cautious not to overutilize available credit.When it comes to credit cards, it's important for customers to understand that carrying a balance incurs interest charges. Paying off credit quickly is crucial because interest is continually charged on the carried balance. Advising customers to make more than the minimum payment whenever possible can save them money in the long run due to lower accumulated interest.According to a poll, 35 percent of respondents use credit cards which offer air miles. Most of these are heavy spenders, charging over $2,000 monthly, and thus could benefit from advice on managing their spending and credit benefits efficiently to maximize potential rewards without incurring unnecessary debts.