Friday, January 27, 2012

Credit Cards are the devil...not really

Hunny and I are looking into investing in our first income property. I thought that it would be great to share some tips that I am learning and have learned during this process. Also, I would LOVE to share some of the things that we learned as two young students to where we are now. It was a process to say the least. Maybe some of the things that I have learned may help you.

Credit cards and college students to me are a no no we you do not have self-control. Hunny and I didnt have self-control and we dug a huge hole that took YEARS to repair.

Credit cards can make or break your credit if you don't follow these four steps.

1. Cut some of your cards.

You do not need 10 credit cards. Find maybe one or two cards and get rid of the rest.

2. Limit your limit. 

Even if you have a card with a 10k limit, if you cant afford it, call your bank to limit it to an amount that you can afford.

3. Only charge what you can afford to pay off at the end of the month.

One of the things that hurt your credit is carrying a balance. You should never carry a high balance on your cards. For those how are afraid of using credit cards. Use the card for something that is cheap every month. What I did was use it for our weekend meal. So, at the most, I charged +/- 50. This was easy to pay it off at the of the month.

4. Avoid credit card cool offers/gimmicks

When I was 18, I was offered a credit card with a limit of 300 bucks but I had to purchase their credit education literature and program which was 200 bucks. The interest was 4% but then after the first month it quadupled.  They were not only charging me for the card but they were making a profit off of me with their horrible literture and rates. I ended up paying double. Of course being a naive young adult, I wanted the credit card. I also wanted to use the card. Being a fulltime college student and working barely part-time was a nightmare.

 I actually still have that card but I was able to increase my limit and lower my interest rate. Took a lot of work to get there.

Additional tip: 

REVIEW YOUR CREDIT REPORT!!!! There are so many people out there willing to steal your identity and credit. Keep your eye on your credit. They can ruin something that you worked so hard to keep up. 

No comments: