When you turn eighteen, you’ll notice a barrage of offers coming in the mail, calling on your phone and popping up online telling you about all sorts of credit that you can get at low-interest rates or with little to no monthly payments. It can be tempting because they seem like an easy way to get the things that you need but ut what happens when we buy things on credit without thinking twice? The answer is: We end up stuck under suffocating debt loads later on down the line.
You deserve better so in this post, we’ll help you decide which offers to pitch, which to keep, and how to protect yourself from getting into financial trouble.
1. Read the fine print.
What might seem like a great deal at first can quickly turn into the opposite. The fine print will often reveal loopholes in promotions and time restrictions on your initial agreement, other nasty little things like fees for various services that are not always mentioned until it’s too late. If there is anything you are uncertain about or you receive an offer from a company you are not familiar with, take the time to research them on a site like ZapData or check the Better Business Bureau for complaints and in-depth information.
2. Consider the offers carefully to choose the right one for you.
Before you call, fill out, or send off the credit card applications, be sure it’s a good fit for your needs. This doesn’t mean that automatically picking a card with a higher limit and/or lower interest rate. It is important to consider stability as well. It might seem tempting at first glance to go with the card with a 0% introductory period on balance transfers while another offers only 8%, but how long is the introductory period and what does the rate go to afterward? then the rate goes to 28%, is it really better than a card that offers 8% interest and never changes? If the introductory period is three months and after that, the rate goes to 28%, is it really better than a card that offers 8% interest and never changes? Always look for consistency with no surprises and as for the limit choose a card that offers a limit that can help you in an emergency situation but is not high enough to get you in trouble with overspending.
3. Opt-out of future offers.
When you select the card or cards you will apply for and use, it’s important to take the time and look out for opt-out opportunities. Why? Because the more offers are coming in your mailbox the more often your credit is being checked which is harmful to your credit score. You want to only allow the companies you ask to check your credit. There should be opt-out information on the application form itself, though it won’t be readily available. You will have to play detective and look for it. There are also organizations and sites that can help you opt out of credit card offers without taking the time to contact each company separately. Check out donotmail.org or optoutprescreen.com for more information and to sign up.
4. Set some rules.
When you first get a credit card, it will feel like it’s “burning a hole in your wallet”, especially if you live on a fixed income. They seem to offer free money and make life easier for people who are struggling financially but there’s one problem: you have to pay it back! Set some rules for yourself to avoid accumulating credit card debt. It is very important that you pay your balance in full every month instead of paying the minimums. If you charge $1000 and only pay the minimum, it would take you at least eight years to pay off the balance so avoid this so that you do not get stuck with an impossible balance that takes years to pay off.
The information in this blog post has brought to light that credit cards are to be used for emergencies, not as a crutch. Failing to handle credit cards responsibly can land you in a mountain of debt that can be difficult to get out of. What action will you take as a result of this post?
Tamra T. Bush is a woman of God, wife, and mother who takes great pride in being an instrument of change for others. Her deep knowledge and over two decades of experience in the financial industry have made her an invaluable asset to families that want a better life. She’s passionate about empowering families so they can have the economic foundation necessary to look towards their future with confidence and build a legacy. Tamra understands that this isn’t just a matter of money, but also resources, strategy, communication, and support systems for when things get tough. That’s why she strives to make a difference on both sides by providing education while helping families communicate more openly with one another.