During a recession it seems tempting to keep pulling out the plastic. Stores are giving away incentives to opening a credit account such as percentages off the purchase, coupons, and rewards programs. It seems too good to be true right? Get your goods and services now and pay, hopefully sometime in the future when you can afford to do so?
Rewind to about eight years ago when I was a college student excited by my pre-approved status as well applying at first for about two cards thinking that since I worked little during the school year I could buy the things I needed during the semester and just make the minimum payments until the summer came around and then pay off my balances. At the time it made perfect sense. Some gas here, books for a class there, but then two cards didn’t have enough available balance so I opened a third, then a fourth. In total I had about seven credit cards working a part time job while going to school full time. Realizing I was in trouble here, I transferred around a few balances knocking the cards down to about five but that left me with five cards that I owed thousands of dollars on. I had even made a few of my car payments using those handy checks that they give you when you first receive your credit card. Needless to say almost all of my trust fund was handed over to Visa, Discover, Mastercard, and American Express to dig myself out of the hole.
Currently I have three credits, but I’m starting to think that even three is too many and I’m about a paycheck away from paying off another and closing the account, even though the closing of accounts does bring down your credit score a little at first.
Having credit cards is nice when there is an emergency, these things tend to happen to me often due to my occupation- events like missing the last train home after talking to a band too long for a concert review and having to find a hotel, car repairs on my falling apart 2000 Camaro, plane tickets to something I just have to see to write about in Seattle…
Having credit cards as an adult means the intent to use them responsibly. Here are some things to keep in mind:
Don’t spend more than your means
Set up a payment plan of realistically how quickly you will be able to pay off large or numerous purchases by knowing how much cash you can devote to a bill each month
Don’t spread yourself too thin on having many cards, instead pay on time and have a good credit history with one card and then ask for your credit to be raised
Don’t charge things there just isn’t a need to do so for. Instead opt to using a debit card
With responsible use, credit cards will build your credit score making it easier someday to buy larger items like a car, buying a home, and good credit score can impact getting some jobs so be sure to monitor your credit use often on a site like FreeScore.Com.