I just got a notification from the bank that my credit limit has been increased $1,000 so I’m feeling pretty awesome when it comes to credit cards. So now is the perfect time to share some tips on building credit!
First, a fun fact about credit cards – did you know that if the credit card is authentic then when but under a UV light a big “V” will appear in the logo on Visa Cards, “AMEX” will appear across the top of American Express Cards and “M C” will appear for MasterCard?
I had always been weary of credit cards and figured that there was no reason for me to have one because I already had a debit card. Sadly, this was completely incorrect. Because in order to basically get by in this world and make big purchases (aka a car, or car insurance, a house/apartment etc.) you need to have credit!
About a year ago I was able to purchase a car from a friend of a friend, which meant that I escaped the credit trap, but when it got to the insurance I was out of luck.
The first step is getting a credit card – if you’re starting from scratch, you’ll most likely have to get it from your bank. But if you have loans that you have started paying off you probably already have some credit that will help you get approved for a credit card.
Credit cards are nothing to fear – they are just pieces of plastic. Your spending habits should be what is feared, and if you have those under control and don’t spend over your means then you’re probably in good shape.
Make your credit card be specifically for one thing to help you not overspend or test the waters. For example, I have a cash rewards card so that means I get 3% cashback on gas, therefore, I mainly use my credit card for gas. Gas also, for me at least (thank you Honda), isn’t that expensive when I’m filling up and I can go a while in between trips to the gas station.
Pay on time – and don’t just pay the minimum. Of course you should always pay your credit card on time. It baffles me that on some of my statements it will say something along the lines of “it will take you approximately 36 months to pay off your balance” because they think in terms of the minimum payment. I make an effort to pay off my balance in full each month.
Be patient. I recently had to purchase a phone outright because my credit came back with “insufficient information” despite the fact that I’ve been using and paying off my credit card regularly and have been making regular car insurance payments. It takes time, but if you take your time you can have great credit that opens a lot of doors!
Do you have any credit fiasco stories?