Know
what you're getting into.
Although
it may not always seem like it,
when you spend with a credit card you are spending real money. In addition,
you pay interest on the money you spend. And the interest rates on credit
cards are higher than interest rates for conventional loans. Combine high
spending with these high interest rates, and you'll watch your debt grow
quickly. For this reason, many individuals use credit cards for their
convenience, but pay off their entire balance when they receive the bill
each month. That means you won't end up spending money you don't have.
Think
about your future.
If you
find it necessary to pay less than the full amount you owe on your credit
card each month, make sure you have a plan for paying off your debt. Whether
it's through a summer job, or a full time job after graduation, make sure
you can make enough to manage your debt. In addition, it's incredibly
important that you pay your bill - even if it's only the minimum payment
- on time each month. All of your transactions with credit card companies
are recorded. When you apply for a car loan or a mortgage, it's very likely
that potential creditors will find out about every late or missed payment.
This information may affect your ability to obtain a loan. Learn more
about how to stay out of credit trouble.
Maintain
your budget
Just because you have a credit card doesn't mean you shouldn't keep yourself
to a strict budget. Set goals for spending and keep careful track of your
expenditures to ensure you're meeting your goals. Credit card purchases
should be included in your list of expenditures. Find more information
about creating a budget.
Know
the benefits
We have no intention of convincing you NOT to open up a credit card account.
In fact, there are many reasons you should. Credit cards are great for
emergency situations, especially when you're on vacation or away at school.
They are accepted almost anywhere throughout the country, and increasingly,
the world. And, used responsibly, they can help you establish the solid
credit rating now that you'll need later on. However, it's important that
while you're taking advantage of the benefits of the credit card account,
you remain aware of the risks and do your best to avoid them.
Give
it a try
Once you're sure you understand the consequences of opening a credit card
account, do research on the best credit card for you.
|
