The common childhood cry, “I just wanna grow up.” No, no you don’t kid. Stay young, stay small, stay little forever! Do you wish you could avoid your mail because now that you’re an adult all you get are bills or credit card applications? We wish we could tell you how to avoid your mail and make all your bills disappear, but we can’t.
Let’s take a step back. At the ripe age of 18 you’re bestowed the title of ‘adult’. Congratulations, you’ve grown up… your childhood cry has been heard. Now, since you’re 18 responsibility starts for things that impact your future, for good. Instead of birthday party invites and RSVPs you start to receive credit card applications. “Congratulations, you’ve been pre-approved for XYZ credit card. Respond today to claim your offer,” or something along those lines. More often than not, those fun letters contain a fake appearing credit card. They really try to sell you, and let us tell you. They’re damn good at doing it. It’s exciting at 18 to feel that you can now have adult responsibilities (more like thinking omg I can buy so many clothes or shoes with my new credit card) and sometimes at 18 you forget about the big picture and make rash decisions.
We’re going to give you a rundown on what credit cards are and how you can make them work for you, rather than you work hard for the financial institution.
Credit Card 101
Uncle Sam has SO many different credit cards, it’s like a sea of plastic and you’re just bobbing your head trying to stay afloat. You reach out and you just hope you end up with the best credit card that suits you and your lifestyle… and one that doesn’t have a 500000% APR, just joking but they are up there. So, what exactly are credit cards? It’s essentially an agreement between you and the money making institution (financial institutions like banks, credit unions, etc). The agreement in place is that they will lend you money via card and you will pay them back in the future at an agreed rate.
Make Credit Work For You
First and foremost, the sole purpose of a credit card starting out for you should be one thing: your credit score. You need a credit score to be a properly functioning adult. Need a place to live that requires a tenant lease? Credit score. Homeloans and so much more also require a credit history check, however some places will give you a car loan without a credit score but at a much higher rate and higher down payment. Having a good credit score notifies lenders you are responsible and can be trusted with being lent money. Now with that being said, we’ll give you some advantages of having a credit card.
Travel Made Easy
Road trip? Different country? Hotel stays? Well, guess what… a lot of rental car places and hotels don’t take reservations without a credit card, and if they accept a debit card they’ll require a large excess amount in your account for damages, etc. Traveling is easier with a credit card.
Although we are firm believers in having an emergency fund with liquid cash, sometimes that’s not the case. Credit cards can be a fall back in emergencies when you have no cash and need money now. These emergencies we’re talking about isn’t the fact a new Michael Kors handbag has just hit the shops.
Yes, we will openly admit credit cards are extremely convenient. If you want to make a large item purchase you can use your credit card dependent upon the limit. Also, you will be able to do online purchases. However, the balance between convenience and budgeting needs to be strict.
These are just some of the every-day life advantages that having a general credit card will enable you to achieve.
When used responsibly, credit cards can allow for you to grow your credit score, purchase large items (sofa, lounge, bed, etc), and things you can’t afford up front but can then make payments on. If used properly, you can use credit cards as a budgeting tool… only if you have self-control and understand the consequences of late payments and accrual of interest.
We understand that the millennial lifestyle is full of dreams, desires, and wants… and sometimes a credit card may seem like the easiest way to achieve those dreams, or euro holidays. However, we want to educate the masses about the importance of credit cards, how credit cards differ from country to country, credit scores, secured and unsecured credit cards and most importantly… responsible use.
Do you want to understand more about credit cards and how to make them work for you? Be sure to sign up today to be the first to know about our next credit series release! Just click the button below.
Amanda & Julia