“Credit cards are all about behavior and understanding how credit affects your life”. - William Cheeks, William Cheeks, Jump$tart Coalition for Personal Financial Literacy
So many young adults and teens don’t realize how important credit is in our daily lives. “Don’t let poor credit stand in the way of achieving your dreams. Credit reports and credit scores don’t have to be a mystery” (MyFico, 2019). Equifax, a site that has a lot of information about credit and is one of the primary credit reporting agencies, describes that companies use your credit for many things, from mortgages to insurance. There are so many things about credit young adults need to know, but for now, let’s focus on tips for getting a credit card and maintaining good habits. Anyone can benefit from these tips, from first time credit card holders to those looking to repair their credit score.
1. Know where your credit card is at all times
If you don’t keep your card in your wallet with your other cards, then keep it in a safe place only you know.
2. Make payments on time, all of the time
Doing this will raise your credit score and help you with things in the future, like buying a car.
3. Keep your credit utilization low, less than 30%
According to credit reporting agency Experian, your credit utilization can impact up to 30% of your credit score. Keeping your credit utilization overall AND on each card below 30%, can help you to build a higher credit score.
4. Pay balance in full every month
Paying your balance completely every month means you don’t pay interest on the money you spent.
5. Get a credit card with the lowest interest rate possible and no annual fees
Having a low interest rate means you pay less in case you’re late on a payment for some reason or can’t pay the full balance. No annual fees means that you do not pay a fee each year for using the card.
6. Constantly check your balance
A lot of credit cards have an app where you can check your balance whenever you want.
7. When or if you get married, know what your partner’s credit is like
If both of your names are on something like a loan, then the credit will affect you.
8. Make sure that you have a job when you open a credit card
Having a job when you get a credit card means you are more likely to have income to pay your balance on time and in full.