This blog post is part of the Financial Literacy series. This information could be helpful to new educators and young adults and has more generalized information that most AskKenna Resources. This is purely anecdotal. Please remember that I am not a financial advisor and this information is provided at your own risk.
Credit cards can be daunting. Most of us have heard many horror stories about credit card debt through the years. Here’s my take: Credit Cards shouldn’t be scary. They should be seen as a tool. Sometimes tools are misused, but that’s no reason to rid your house of hammers—it might just be a good reason to watch your thumbs as you use the tool, if you don’t mind following that metaphor a little more. The main question to ask before getting a credit card is “how much self control do I have?” Knowing yourself is tough, but with reflection, you should be able to know if you can trust yourself with a credit card. So when you’ve got your answer, here are your options:
- Don’t get a credit card—yet. If you have had trouble with credit cards in the past, or know that you just can’t say no, you might need to wait for more maturity before you embark on this journey. However, for most people leaning towards option 1, I would encourage you to consider option 2.
- Get a credit card—but hide it. Get a credit card, put one recurring charge on it (such as Netflix or a music subscriptions), set it to auto draft every month so you never forget to make a payment, and then put that card in the safe or somewhere out of reach. If you saw Confessions of a Shopaholic, you’ll remember she “hid” her card in a giant block of ice. Bold but effective strategy. One caveat here: if you run your bank account so low that you’re not sure you’ll always be able to cover a recurring auto draft (even a small one like a music subscription), you may not be ready for option 2. The benefits of option 2 are that you are building credit (more on credit scores in future posts) by making a on-time and complete payment every month and establishing a credit history.
- Get a credit card—and make it work for you. If you know that you have great self-control and are already sticking to a budget on a regular basis, you are probably ready to use a credit card for most of your purchases. This is good because you will gain points or airline miles depending on the credit card you choose. The important thing to remember is that you stick to a budget and always pay your card in full every month you possibly can.
HeyKenna 