UNITED STATES—Credit, it’s something many of us learn is of importance as we transition into adulthood. Having credit, in addition to having good credit is key to purchasing a car, buying a house and getting so many other amenities in life. However, when is too much credit a bad thing? That is a question so many people think about, but don’t always consider.
I recall vividly when I got my first credit card. It was my freshman year in college, and I happened to walk past a booth on campus where, the credit card company had a representative helping college students get signed up for credit cards. I was not skeptical about getting a credit card because unlike most of my peers, I actually had a job and had been working since I was 14. So I know what it means to earn my own money and to pay bills. The limit was not too high, only $500 to start, and I rarely used the card to begin with. The only time I actually used it was when I got into a bind with college tuition and I took out a cash advance. MAJOR NO NO! Never take out a cash advance people, it’s the worst thing you can do and the interest on that cash advance alone could take you years to pay off, just don’t do it.
After paying off that card, I got a second credit card about 4 years later after graduating from college and landing a better job. This card is a favorite of mine till this day. The interest rate is quite low and there are plenty of perks that come with this particular card. I’m a person that believes having a ton of credit cards is NOT a smart idea. You don’t want to be tempted to spend if you don’t have to people, remember that. The more access to cards that you have, the more inclined you may be to utilize those cards, when your budget gets in a bind.
Department store/retail cards, I would absolutely say stay away from. While it’s a benefit when you open the account, beyond that, the perks are not that great in my opinion. What is worse, these types of cards have the highest APR than an actual credit card. Look at it this way, you can utilize most credit cards at most retailers, so is there really a reason to have a credit card for that specific retail or department store? The answer is: NO.
Don’t let those sales people tempt you with the 10 percent or 15 percent discount you’ll save if you open a new account. Look people, anything less than 35 percent in my opinion is NOT a lot of money unless you’re spending massive amounts. So unless you’re getting a steal like 50 percent off your entire purchase if you open a new account, I would stay away.
Now, let’s talk about something so important, so many people fail to realize it till it’s too late! Do not open credit or co-sign any car loan, house or credit card for anyone. I know it sounds blunt, but you are at risk if the person who you co-signed for fails to make payments or pay off that debt. It’s a stressor and a headache that is just not worth it. Yes, you might be doing a favor for someone, but in the end it tends to hurt you more than you think. I’m speaking to you from personal experience. I helped co-sign with a family member on a credit card with the agreement that I would not run into a situation where I would have to take my hard-earned money to pay off a debt.
Guess what, I’m paying off debt for someone who didn’t properly budget their earnings to ensure no interest would be charged on a purchase made. Lesson learned, I’m livid, but the person knows, they can NEVER ask me to co-sign for anything ever again. In addition, if anyone asks the answer is a flat out: NO! Don’t be afraid to tell people no, you don’t want your credit screwed up because someone else doesn’t care about their credit report, credit score or their credit history.
Maintaining good credit is like a full-time job: it’s something you always have to work at. Always pay your credit cards on time, be wary of any deals that seem too good to be true: nothing is free in life people, nothing! And most importantly, pay off as much of your debt as you possibly can without hesitation. It’s better to be broke and have no debt, than to have money and have loads of debt. Remember that.