As a kid, you probably once thought that the most grown-up accessory adults can have isa credit card. It must’ve seemed crazy unreal to see how the adults around you could eat what they want and buy what they want with just a swipe of a card. You’ve probably mimicked it too while pretending to be all grown up as you playhousewith friends.
Unfortunately, at some point, you find out that life isn’t as easy as just swiping a plastic card. There is much more going on than what you have seen as a kid,and you realize that being an adult comes with infinite new responsibilities too.
But with infinite responsibilitiescomes infinite opportunities as well.
That’s right. Adulting might not be the easiest thing in the world but it can definitely be one of the most vibrant seasons of your life –especially when you’re still in your 20s. If you want to fully enjoy your time as a young adult and at the same time, start creating strong financial foundations that can help you later on in life, then applying for your very first credit card is a must. And we’re here to tell you why.
If you’re pretty new to the idea of using a credit card, or you are hesitating because you don’t know whether you’ll be able to manage it well, we want to assureyou that there is nothing to be scared of when it comes to using a credit card –as long as you educate yourself about it first.
In fact, building a good credit profile during your younger years can be a real lifesaver in case you find yourself in a financial pinch in the near future. Having good credit history can be your express ticket to availing yourself of bigger, much-needed loans later on in life, such as mortgage or auto loans, as well as business loans.
Today, we will share 3 essential tips that can help you manage your first credit card wisely so that you can reap all of the benefits with none of the risks.
Choose The Right Card For Your Lifestyle
Everyone has a different type of lifestyle that works just for them. It either gives them more convenience, more happiness, less trouble, and just overall more fulfillment. For some people, this means traveling around the globe and feeding their wanderlust. For others, it’s being able to afford what they want —be it gadgets, books, bags, shoes, andwhatnot. There are also those who find fulfillment in making themselves better through advanced education and training.
When choosing a card, choose something that best supports the kind of lifestyle you want to lead. You might want to compare card offers, such as Chase Sapphire Preferred vs. Amex Gold. The right card can help you maximize your benefits and reward you with the right perks.
For example, if you’re intotraveling, then a card that prioritizes air miles as a perk would be the most ideal one for you. If you like shopping, then a credit card with a reward point system that favors mall and online purchases would be better. Either way, find the one that worksbest for you.
Spend Money That You Already Have
The next and probably the most important tip we can give you is to never spend money past what you can afford. The general rule of thumb with credit card spending is that you only spend money that you already have —not money you expect to get next week, next month, or next 6 months. It has to be cash you already have and basically, you’re just running the transactions electronically but already have the money to pay for it soon after.
It sounds roundabout but what this does is that it allows you to reap the reward points that come with your card with none of the financial risks. This way, you can truly say that you are maximizing the perks that come with your card.
Spending money you don’t have immediately translates to a liability or in other words, debt. You don’t want to fall into a debt spiral as credit card interests are relatively high and it’s easy to lose control if you lack the discipline. Check out more information here: https://www.comparethemarket.com/credit-cards/content/guide-to-paying-off-your-credit-card/.
Always Try To Pay In Full Every Month
Speaking of discipline, another tip we have for you is to always pay your credit card bills in full as much as you can. If you follow the preceding pointer, you’ll have zero problems following this one as well. And at the end of the day, it all comes down to how disciplined you are about paying back the money you owe.
The thing is, it’s very easy to borrow money but paying it back can be quite challenging —even if you already have the cash to pay it back. The “minimum amount due” can be such a tempting proposition; it means that as long as you pay the minimum amount, you’re not getting in any trouble. However, the devil is always in the fine print and 21 days later, you’d be surprised at how easily interests can stack up when you fail to pay in full.
Case in point, if you have the money for it, don’t even second guess and just pay your credit card balance.