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First Credit Card… Be Wary…

7/2/2018

17 Comments

 
Authored by​ Susan Langley, 23 Years with ECU Credit Union and 35+ years in the financial industry.  "People helping people and working for our members not stock holders is why I love my job."
People who consider a credit card "free money" are headed for trouble.  I have found if you cannot pay your Credit Card balance in full every month you should not charge it.  Don’t be enticed to use your card to make a purchase just to earn Reward points unless you have the self-discipline to pay your credit card off every month or you may find yourself in trouble.   Here's an example:

​Hired as a co-op student at a credit union, Heather worked hard and received a promotion. She wanted new clothes, so she applied for a credit card. 

Heather paid the minimum monthly payment each month. Because of her payment record, the credit union agreed to raise her credit limit. Heather was off to Jamaica, where she used her credit card a lot. 

Heather paid down her credit card debt, then ran the balance up again--again and again. Five years later, Heather owed more than $5,000--and, technically, she still was paying for her Jamaica trip. It took Heather almost 12 years to finally paid off her credit card debt! Not only did she pay triple the amount charged, she was unable to save money. 

I feel credit card debt is one of the easiest ways to get yourself into financial trouble my advice is to be wary of the introductory and pre-approved offers, take your cards and place them in a secure inconvenient place and use them for emergency purchases only.  If the card is convenient to access you may fall for impulse buying.

Start slowly with your first credit card. A smart money management rule is to avoid paying interest on your credit card charges by paying the balance in full each month. That way you'll enjoy the convenience a credit card can bring, while avoiding unnecessary finance charges and debt that never seem to end. 

What advice do you have for Heather?
17 Comments
Maria
7/5/2018 09:37:24 am

Pay it down as quickly as possible always making an effort to pay more than the minimum. Get rid of the high interest ones.

Reply
Isaac link
3/10/2022 04:05:13 pm

This right here is great advice.

Reply
Gloria
7/15/2018 02:36:31 pm

Place credit cards in a safe place, not in wallet. Have account alerts set up.

Reply
Patricia
7/15/2018 02:37:52 pm

On my credit cards I pay my payment and the interest for that month and it seems to go down faster once it's paid off I'm tearing them up

Reply
Kandy
7/23/2018 05:08:43 pm

Never get a store offered credit card you only need one credit card for big purchases or online shopping and pay entire amount as soon as you get the bill.

Reply
Joseph
7/27/2018 11:44:39 am

Look for credit cards with low rates and offer no fee to balance transfer. Hidden balance transfer fees can add a lot, which takes away from saving on the lower rate

Reply
Gloria Barbeau
8/4/2018 07:52:53 am

I can not always pay the credit card off each month. I am retired and on a fixed income, when I need to make a purchase for washer & dryer I can not pay it off by the end of the month. So I choose a card that I can purchase the items & pay certain amount each month with no interest. therefore I am paying the card off in a matter of months instead with no interest instead of yrs with a lot of interest.

Reply
Felicia Miles
8/6/2018 12:07:59 pm

Credit cards are very helpful when you use them correctly. If you are unable to pay off the entire balance directly after making a purchase, attempt to pay more than the necessary monthly fee request.

Reply
Natalie Noble
8/9/2018 11:12:12 am

Credit cards are a great way to earn points. I use them to pay monthly bills. However it is not free money. Pay them off monthly to avoid interest charges.

Reply
Tiffany Rodgers
8/22/2018 06:55:58 pm

After you pay them off i would cut the credit cards or cut the credit cards up first.

Reply
Samantha Class
8/27/2018 03:29:18 pm

I completely agree with using the credit card for emergencies only. I have a starter credit card so luckily I can't get myself into too much trouble debt-wise, but those "little purchases" add up so quickly and before you know it, you're WAY over your spending for the month, and that notification when your credit score decreases is the WORST! Heather should put minimal monthly expenses (Netflix account, Sunpass, Spotify etc) on her credit card so they're guaranteed to be paid anyway, but she doesn't get ahead of herself with her spending. That was she can spend without regret for her next vacation!

Reply
MARILYN CLASS link
2/24/2019 06:48:40 pm

Agreed.

Reply
Jeaneki Lee
11/21/2018 10:59:28 am

Something my dad often times told me if you don't have the cash to pay for it don't charge it. Boy has that statement helped me to keep a steady balance on my credit use and swiping wrist. They are EXCELLENT in building credit and other great things. Just use it wisely No Cash No Charge.

Reply
Velma Sadler link
2/15/2019 06:13:28 pm

I would suggest when you make a monthly payment make an additional payment and apply it to intrest do this as often as you can.

Reply
monis ahmed link
9/7/2021 08:15:51 am

Great information sharing with us, everyone confused when he/she choose your first credit card.

Reply
clic aqui
11/16/2021 10:58:35 am

Durante mucho tiempo, las tarjetas de débito son la modalidad más utilizada por la mayoría, tanto en cuentas particulares como de empresa. Esta no funciona sólo como un instrumento de financiación, sino que se utiliza para sustituir el dinero en metálico. De un tiempo a esta parte ha perdido terreno frente a la de crédito, en parte porque a los bancos le es más rentable, aunque para el consumidor, que busca ahorrar al máximo, no es la opción más óptima.
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Reply
shriinfo link
4/3/2022 01:35:02 pm

I suggest using a credit card only for emergency purchases. And also get rid of high interest.

Reply



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    This Blog is written by various ECU Credit Union associates.  With 30+ years in the financial industry helping our members achieve financial health.

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