“Whats In Your Wallet?”
Credit Cards. The sign-up booths are scattered everywhere around campus! They’re the average college students “piece of candy,” if not used in moderation will bring them nothing but a world of pain in the end. Everybody wants needs them but doesn’t know how to use them. Credit cards, if used correctly, can actually serve as a major benefit. If you take care of it, it will surely take care of you! Because I took care if my credit card during college, I was able to build it up and graduate with awesome excellent credit. Before you give in and make your way to that sign-up booth, heres some insight that helped me that might help you too.
First off, lets understand what credit is in lamen terms…“SOMEONE ELSE’S MONEY!” Its not YOURS! Its money that your borrowing with the intentions on paying back later WITHinterest! If you buy something for $10 expect to pay $15(if you don’t pay in full on the first bill) when that bill comes. The longer your let it sit the more interests it will accrue. Not necessarily a bad thing - well not the credit lenders at least. That’s one of the ways they make their money! They have to benefit from it somehow. I hope you didn’t think they lended you money because they thought you were a nice person! Not at all. Nothing in this world is comes free.
BUT...
how can I benefit from this if I’m only borrowing money that I have to payback with INTERESTS and in turn borrowing more money than I initially intended on? Good question!
With extreme self-control and discipline! By purchasing things you would have normally purchased with cash use your credit card. But ONLY if you have the exact amount without going over your budget. That means not purchasing an item for $100 when you know you only have $50 in cash!! By doing this your limiting your credit card for what your parents intended it to be used for which is “emergencies” only. Later, when you get the hang of this then you can graduate to other things like shopping, road-trips and whatever you heart desires but ONLY if you have the available funds on hand! Rule of thumb:DONT SPEND WHAT YOU DONT HAVE!!!
Just like a lot of other college students on campus I was given a nice parting gift in the form of a car from my mom. Although as nice as it was that car came with a nice little price tag on the end of it! It wasn’t anything special;a 2000 gun grey Toyota Camry but irregardless of how simple I thought it was I still had to make payments on it every month! I thought to myself,I had to benefit from this setup somehow. Instead of directly using my checking account, I would use my credit card and then simply replace the money from my checking account back to my credit card. Not only did the dealership get their money, the credit card company got their money as well and I received my good credit history.
Now, here’s the TRICK !!
Although I had the full amount on hand I wouldn’t pay the full thing at one time. I would leave a small balance leftover to purposely allow the credit card company make some money off the interest that would accrue. Note: This shows the credit lenders that not only are you good at paying back but you know how to make consistent payments over time! You simply taking money and paying it all back just shows that you know how to borrow money and pay a bill. Thats GREAT! But they don’t benefit from that! Break up your payments into increments of your choice until its paid in full, BUT be very careful to not use the card until the first purchase is paid for! This slip up, if not careful, can mean certain death in accrueing a high unexpected balance!
So, all-in-all credit cards aren’t that bad; it’s just the miseducation and incorrect use of them that make them bad! Unfortunately, we don’t live in the era of the bartering system so depending on what you want in life YOU’RE going to need good credit! All you can do is use them the to the best of your knowledge and keep your fingers crossed when the time comes to pull that score! The bottom line is that we’re going to spend money no matter what! At least your spending can count towards something!! If you want to pull your score or simply get more info visit Freecreditreport.com or Myfico.com.
