Getting a credit card is one of the first major signs that you’re finally starting to ‘adult.’ It’s incredibly exciting suddenly having access to so much money, but those dollar signs in your eyes can easily make you act recklessly without thinking about it. There’s a lot more to credit cards than just being a source of money, after all. We’ve thought up some things you should keep in mind when you first get that magic plastic card in your hand. You know, so that you don’t land yourself in any trouble.
You’re playing with your future
If you’ve managed to get a credit card, then it means that your credit score is considered to be in good health. This is great news, but that doesn’t mean you can start splashing the cash. The way you behave with your card will ultimately affect your credit, and the last thing you want is to negatively affect your score. This can hamper your future chances of getting a loan, car or even a job, plus it will land you with high-interest rates for everything that you do get approved for.
It’s not free money
While a credit card may seem like the pot of gold at the end of a rainbow, it’s not. Yes, it will get you out of a pinch if you urgently need to buy or replace something, but it’s not an infinite pool of money. The well will dry up at some point, and you’ll still have to pay it all back. Every last cent. Scary, huh? It can be a little intimidating to own a credit card, but you shouldn’t feel put off using it. Just remember that it’s best used as a short-term fix, and not an opportunity to splurge.
There’s that little bit extra
Interest rates exist, and they’re a pain. Before you get a credit card, you should make sure you know how much interest you’ll have to pay once you start using it. It can differ between providers and will likely be affected by how good or bad your credit score is, so it’s worth taking a look around before you take the plunge. Some providers might offer a grace period before the interest kicks in, but it will happen eventually. So, just remember when you’re paying out several hundred dollars using your credit card, you’ll be expected to pay back more than that when you get your bill.
Bills, bills, bills
Never let yourself get in too deep. If you’re not able to pay back the money you’ve been spending on the card, the problem will not just go away by ignoring it. If you don’t pay your bill, it will end up in the hand of a collections agency, and that’s the last thing you want. They will hound you until you’ve paid them back, and your credit score will suffer massively. Do you really want to have more people on your case?
Asking questions is okay
Adulting – isn’t it the worst? Once the excitement of being legal and free from your parents dies down, the whole thing can make you want to curl up in a ball and cry. There’s so much that comes with being an adult, and not all of it was taught to us while growing up. While you may think that you’re on your own now, you’re not. Always ask questions, whether it’s to the people you’re getting the card from, or just your parents. Anyone who’s gone through the process before can easily walk you through everything you don’t understand. It will lift a massive weight off your shoulders.
Credit cards are a lot of pressure, but don’t get overwhelmed. What we’ve talked about here is important, but it doesn’t mean that owning a credit card is going to destroy your future. Just be careful with your spending.