Start Building Credit Young

Everyone you meet will have a different opinion on credit cards.

“It’s an easy way to get in over your head in debt.”
“You’ll end up spending more than you make.”
“It’s the only way to be able to make large purchases later in life.”
“If you treat it like a debit card, you’ll have no problems.”

At the end of the day, how a credit card affects you always comes down to one thing: self-discipline. We’ve outlined a few ways to help credit cards work for you rather than against you.

Small Limit
If it’s your first line of credit, your bank is not likely to give you a big limit on your credit card. Chances are your limit will be a few hundred dollars a month. This is a great place to start for a few reasons. The first reason is that you won’t have to worry about paying it off. You can save your credit card for only gas, music subscriptions, or a recurring fee you know to be the same each month. This will keep you from making too big a purchase you know you can’t pay off.

Interest Rates
Unfortunately, many credit card companies will try to trick first-time card holders into options with high interest rates. If you pay your card in full each month, you won’t have to worry about recurring interest as much. However, if big purchases are being made in the long run and you know you’ll need time to pay the bill in full, you’ll want to ensure that you obtain a low interest rate.

Always Pay Your Bill on Time
This is so important. Missing your payment when it’s due is a quick way to have your credit score lowered.

Pay Your Balance in Full
It’s always best to live within your means when it comes to day-to-day spending. We know that sometimes emergencies arise, and you’ll need funds to cover the cost. However, paying your total balance in full will help avoid high interest rates as well as quickly raise your credit score.

Responsibility is key when handling credit cards. Be sure you have a plan of action from month to month, and stick to that budget!