Credit cards are one of those love hate things. You love it if you’re good at using it… but hate it if paying off credit cards is the demise of your monetary freedom.
But we all need credit. Well almost all of us. Unless you live off of cash and can buy every single thing you own outright. That goes for your house, car, and whatever else. If you’re balling like that, then spread the wealth this way.
Maintaining good credit is a really simple concept. It’s not your money… so you have to pay it back. Boom.
For example, you lend your friend Kevin $20 and he says he’ll pay you back in a week. One week later… You ain’t heard from, or seen Kevin. He doesn’t pay you back for three months. You’re feeling a little iffy about Kev now. Things aren’t quite the same.
He asks you for another $20 the next month, and you’re reluctant giving it to him, but you give him another chance. Again, he pays you back late.
That’s it for Kevin. You’ve made it up in your mind not to lend him anymore money because he never pays you back.
Well, that’s how credit card companies are with people. It’s nothing but a simply relationships: I loan you money, you pay me back.
Credit cards take a lot of discipline. It’s not your money, even though the card is in your wallet. Don’t get it twisted, boo.
I opened my first credit card in college. It was the perfect time to have in case of emergency, and to charge bigger items like textbooks. My limit was low, only $500, and I paid the minimum balance every month. That’s all I could afford, which is totally fine.
Being ready to open up a credit card doesn’t just depend on age, but it really depends on your maturity. Going and charging your card with a flat screen TV or a MacBook, just for the heck of it is not a smart way to use your credit card. You have to have a plan on how you will pay it all back… and in a timely fashion. Build your credit, don’t tear it down.
If you can’t afford it on your own, you can’t afford to pay it back. So be wise with how you swipe. Remember that.