Raise your hand if you have ever been eaten alive (almost swallowed) by credit cards? My boyfriend has been eaten, chewed on, and spat back out by credit cards & I have taken it upon myself to learn from it. I made the decision to NOT apply for any credit cards until I finish college & pay off my tuition. I was fortunate enough to be able to pay my tuition off as soon as each one comes since I decided to take the gruesome option to pay by cash. This means that I was paying my tuition every two months before my next classes started. It was hard but well worth it now.
Now that I am done with school, I can start focusing on making the decision to start building my own credit, which if you refer to my previous "Life" post you will know I added it to my 2014 Goals.
So why is everyone so afraid of credit cards? I mean it is money that you can spend without having to work hard for it, right? WRONG! It gives you a certain amount that you are able to spend but when that bill comes the next month, BAM everyone struggles. The thing is, credit cards allows you to easily spend money you do not have. I like to call it "culprit that allows you to live beyond your means."
I have taken a few tips from my boyfriend as well as my mother (she's very frugal.)
- Don't apply for mail-offered credit cards.
- Never go for Capital One. It says "No Fees" but they do have hidden fees up to $42 a month (for not spending anything.)
- Spend only half or less of your credit card limit.
- Spend only what you can pay back monthly without being behind your other bills.
- Use it wisely. Choose a small monthly bill that you can repay easily such as a phone bill.
- Or use it to pay a small debt (at the most $1,000) monthly.
- Once you pay off your credit card debt, cancel your card, & cut it.
- Trying to bump up your credit? Continue with Tip #5 or #6.
- Do not look at a credit card as free money for your "wants", but rather as for your "needs." Needs that you can pay back.
It does not have to be a hassle dealing with a credit card, you just need to use it wisely & look at it as an emergency purpose or as an extra boost on a monthly bill. It is easy to get carried away with credit cards so the best way to avoid that is to avoid "living beyond your means."
After we paid off our credit card debt, we have paid off the full balance of $500, called the company the same day, & cancelled it. We also felt relieved when I cut the plastic demon up that same day. I went to bed fully satisfied knowing that it is one less thing that's eating up money. We are planning to apply for our own credit cards through his bank after we open a joint account (to use as our joint account (savings), but we'll still have our own personal savings) & use it just to pay for our phone bill & groceries. We are still debating on wether we want credit cards now or if we should pay off at least one more debt before doing so. I am sure we will keep you updated :)
In the meantime, if you are planning to apply for a credit card, please do your research & evaluate your lifestyle and your needs versus wants.