We all
know how it feels to leave our parents’ house to live on our own for the first
time. It’s exhilarating, but it can also be a bit overwhelming. There’s so many
new things to explore and so much new information thrown at us. One of the
biggest thing that we have put in front of us is financial decisions and more
specifically, credit cards. We’ve all seen our parents use them, and as kids we
always thought it was free money, very rarely were the words “bill” and “debt”
tossed around. However, it’s one of the biggest pitfalls of having a credit
card.
It’s
hard to understand what all that little fine print reads without a business
degree or some form of translator. It talks about things like APR and interest
rates, with catchy things like zero interests throw in to lure you into
accepting their offer. Very few people read through all 30 or more pages of the
fine print but it’s a very important aspect of accepting a credit card. You
should know that you have to pay a credit card off, or pay the money back to
the lender, much like a loan. What you may not realize is that you have to pay
back the money you use and then some. It’s called interest and it’s how the
companies make their money from you having a credit card. It’s not so much fun
to have the credit card if you have to pay back not only what you used, but extra money on top of that.
If you
forget or just simply don’t pay the money on your card every month, it starts
to add up. You aren’t only being charged interest but now you have the late
fees. There’s only a certain amount of time you have to pay it back before it
starts to affect your credit. Credit cards can be great to build credit but
they can also destroy your credit much faster. You need to have good credit to
buy or finance things like a car, a house, a loan and even to rent an apartment
from most places. If you can’t afford to pay back the money you’re using, it’s
probably a good idea in the long run to just avoid having a credit card and
start a savings account with the potential money you would use. That way when
you need it, you can start to buy things like a car.
While
having a credit card can seem like a great idea and an awesome way to exercise
your freedom from your parents, when you’re out of college and have to start
thinking ahead about your future, that little college credit card and credit
card debit can come back around to haunt you. It’s best just to wait on it
until you have a steady job and you’re ready to have all the added
responsibility that comes with it.
