Adulting 101: Credit Card Catastrophe
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| [Graphic by pikisuperstar] |
By Glorianna Noland
Having
a credit card doesn't equate to always using it.
Rule
of thumb: if you can't pay for it with any actual liquidity or cash, you really
shouldn't be paying for it with the card.
"But
why?" one may ask. "There's money on it, why shouldn't I use
it?"
The
answer my dear, is what goes wrong when you can't pay off your credit card:
high interest rates, late fees and the huge dent it can have in your credit
score (considering that 30% of a credit score is based on your debt). Y'know,
the thing that you use to prove you're not a risk to the bank so they can give
you a loan?
Now,
if it’s an emergency and you need those funds, more power to you
Various
tips such as avoiding your credit limit (not spending more than is on
the card), checking your statement, and setting up an automatic payment plan to
avoid late bills can protect your financial future.
Even
choosing a card that offers a long 0% APR, which will save you the most on
interest if you end up maintaining a credit card balance most months.
I think it's best if I stay away from owning a credit card right now. I have a terrible shopping addiction.
ReplyDeleteI have a rule with myself that I pay off my credit card balance as soon as it goes through. This way I build credit, but basically use my credit card as a debit card.
ReplyDeleteI've never had a credit card and I'd like to keep it that way as long as I can.
ReplyDelete