Now that the holidays are over and a new year has begun, many people are using the time spent indoors on chilly winter days to declutter and organize paperwork in preparation of tax season. Before you pull out the shredder, it is essential to understand what papers and statements you need to save and what you can throw out. In the past, people kept all of their important papers in a file cabinet in carefully labeled files, but the papers could be destroyed during a flood, theft or fire. These days many consumers use technology to keep their documentation safe and sound. Many people electronically scan their paper documents and save online versions for future use. However, technology is not fail-safe. Beverly Harzog, credit card expert and author of "Confessions of a Credit Card Junkie: Everything You Need to Know to Avoid the Mistakes I Made," recommends making sure that you back up your electronic documents by copying the files to a service such as Dropbox, back up on an external hard drive or use an offsite backup service. "I had a computer crash last year and since I only have online statements, I would have been lost without the backups," says Harzog. Here are five types of documentation that you need to save, and how long you should keep your various paperwork.
Credit card and bank statementsJohn Ulzheimer, president of consumer education for CreditSesame.com, recommends saving all bank statements and credit card statements for at least one year. You can save emails with your online statements, you can save screen captures of your online statements or you can scan in copies of your paper statements. "You can most likely get the statement from your bank or credit card after that, if you need it," Ulzheimer says.
Cardholder agreementsMany people stuff their credit card agreements in a drawer or accidentally toss them. But if you have a question or there is a dispute, having your cardholder agreements on hand can be essential. "You should also save your cardholder agreements and any changes to your agreements that are mailed to you. They outline your rights and any changes to the terms of your credit card accounts," says Ulzheimer.
Be sure to date each agreement so that you know which one is the latest version.