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Credit or Debit? A Wake up Call from Your Financial Future

If worrying about our GPAs, mental health and Friday night plans isn’t enough — we’re bombarded by shiny advertisements of credit cards at almost every store in sight. However, if you only use cash or debit and think you don’t need a credit card, think again. Here’s a fool-proof guide to building credit and reclaiming your newfound financial independence.

Do your research

Signing up for a card can be scary, but it doesn’t have to be. Find a student card to start with. You’re more likely to be approved since companies understand this is most likely your first credit card. That being said, do NOT sign up with a store credit card first. They tend to have higher APR rates than regular credit card companies with little to no grace periods. (This is adulting terms for: You’ll end up paying more for items you buy in the long-run, and they’ll make you start paying towards your debt as soon as you swipe your card.) Research is essential. Simply applying for a card requires a credit inquiry, which negatively impacts your credit score. So when choosing the card of your dreams, choose wisely.

Having no credit is worse than having bad credit

If you don’t already have a credit card- get on that ASAP! Your financial footprint will pave the way for your ability to acquire substantial assets post-graduation. Don’t take it lightly! In fact, even though I’ve had a credit card since I’ve been 18, having a credit history of only 3 years has the largest negative impact on my credit score. So, ladies, the time is now!

Don’t get crazy with your cards

Credit card utilization rates are the bane of my existence. If you want to have a credit score as flawless as you are, do NOT, I repeat do NOT exceed a thirty percent utilization rate. This means, if your credit limit is $1,000, don’t spend any more than $300 or it will affect your score for the worst. I learned this the hard way when I first signed up for a credit card and foolishly regarded it as free money. But I digress.

Mark your calendars

Don’t forget your payment deadlines! Usually credit card companies (if they’re fair) will waive your first missed payment, but you never want to use that as a crutch. Most companies make it easy and allow you to link your debit card to make mobile deposits, so there are no excuses. Priorities ladies, priorities

Don’t stress, stay blessed

Continue to make your payments, don’t go overboard with spending and watch your credit score flourish. Eventually, you’ll be able to increase your credit limit and possibly even apply for more credit cards. Your financial future is counting on you, take the steps needed now to guide you in the right direction. Make yourself proud!

Nicole Merendino

Montclair '20

Just a curly-girl chugging through life one existential crisis at a time. Nicole is a Junior at Montclair State University studying Business Administration with a concentration in Marketing and a minor in Spanish & International Business.
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