When you become an adult, credit is something that is unavoidable. It follows you everywhere. From jobs to apartments to car dealerships, credit is something that is incredibly important. Student loans, medical bills and utilities are just a number of things that can potentially hurt or improve your credit. But what about the credit card? The glorious device that allows you to buy things now and pay for them later? They can be beautiful, but it is important to be cautious when using them.
Do start credit accounts with your credit in mind. Although the thought of being able to do as much shopping as you please without actually having to pay for it in that exact moment may seem appealing, building good credit for your future is better. Good credit opens doors to great apartments, shiny new cars and financial stability.
Don’t start credit card accounts with big spending in mind. Unless you have a through plan on how to pay the company back, it is helpful to use credit cards as a tool to improve your score, not score a pair of overpriced designer jeans. Starting an account with a thousand different stores just to be able to enjoy new clothes can lead you to a world of debt.
Do make small purchases that will be easy to pay off on time. Regardless of how little the amount you charge to your credit account, you will be happy to know that it slowly but surely raises your credit score as you pay it off. Small purchases such as gas or snacks are easy to pay back and can ensure that you don’t end up in over your head.
Don’t get sidetracked by the possibilities. Yes, it would be great to take that $2,000 Groupon trip to Greece over the summer but let’s be realistic, are the payments going to be worth it? Being stuck paying off something for years only builds interest and plummets your credit score.
Do use your credit card as back up funds. If you have already paid for your whole vacation in full use your credit card to buy small souvenirs for friends and family. Or maybe even for a couple of beachside drinks.
Credit cards can be wondrous. I mean, who ever thought that you could spend money without actually using any of your own money? Well, that’s the thing to remember, it isn’t your money. And although it is spendable, it is money that you will soon have to payback. Let’s stay smart ladies!
HCXO!