So if you’re a credit virgin, getting a credit card can be terrifying and exhilarating at the same time. You no longer have to carry cash with you, and you can buy as much as your credit line allows for a given month. But as always, there’s a catch. Bad credit as a result of poor money management can result in long term consequences for you and anyone who shares financial burdens with you, which can affect your ability to thrive and save for old age. Thus, I give ye the three major keys to financial success.
You in your financially stable independence. #killingit
Major Key #1: Call your credit company ASAP.
As soon as you get that lovely hunk of plastic in the mail, call your credit company to activate your account. Once you’ve activated your account, set it up so that you have automatic withdrawal (from your chosen bank account) each month for the FULL BALANCE on the card, every month. DO NOT agree to pay the bare minimum.
This is where credit companies prey on your ignorance. Initially, the accounts are set up to send you the monthly statements by snail mail, and they encourage you to only pay the bare minimum each month. Also, they charge for paper statements, so request an email statement every month instead of the traditional; it’s more green for the environment and saves you from being nickel and dimed (at least a little). Don’t fall for their scams! This is how you end up in a credit black hole, because that bare minimum payment is put off to the following month and the longer you wait to pay it, the more interest it incurs.
Major Key #2: Assign it to a monthly expense.
Part of why setting your card up for automatic withdrawal is important is it prevents you from being too liberal with your freedom. Just because you have a credit line of $500 a month, doesn’t mean you actually can afford to spend $500 a month on whatever you please. So assign the card a job. Give it a purpose for every month that limits how much you spend. Use it to pay your electric bill each month or groceries or gas. Only use it for that one expense, and only use it when you must. Online shopping is the worst offense, because you can spend mad cash without ever realizing you’re blowing upwards of $300 to $400 a month on clothes, books or fun odds and ends, which seriously add up. Also DO NOT use it for alcohol. Just trust me.
Major Key #3: Keep an eye on your accounts.
Although your credit company notifies you every month what your outstanding balance is, you may forget what exactly you bought. Particularly if you use your card for bills (which can get pricey), you may not notice immediately if more money is being taken from your bank account than you thought. So keep an eye on your statement and your bank account. If something seems sketchy, catch it early! Identity theft from sketchy websites or sneaky credit-company fees can put you in serious economic distress. As if college wasn’t already stressful. Taking a look at your accounts once a week can keep you on track and reasonably debt free.
Dolla’ dolla’ bill y’all
Remember the major keys to success, smart shoppers. P.S. Don’t be afraid to ask people about their money saving tips. You will be wiser and wealthier for it.
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